Once again, a long-time investor, through a FOIA request, was able to obtain the grant application documents for American Battery Technology Company. This is the $150 million grant that is part of the funding for the South Carolina 100,000 tpa lithium-ion recycling plant. The vast majority of it, like the documents for the Tonopah grant, is heavily redacted, but there were some interesting tidbits nonetheless.
Before we begin, I want to include why the company has documents like this redacted.
FOIA Exemption 4 protects trade secrets, and commercial or financial information obtained from a person that is privileged or confidential. The courts have held that this subsection protects (a) confidential commercial information, the disclosure of which is likely to cause substantial harm to the competitive position of the person who submitted the information and (b) information that was voluntarily submitted to the government if it is the kind of information that the provider would not customarily make available to the public.
FOIA Exemption 5 protects from disclosure those inter- or intra-agency documents that are normally privileged in the civil discovery context.
The three most frequently invoked privileges are the deliberative process privilege, the attorney work-product privilege, and the attorney-client privilege.
Deliberative Process Privilege
The deliberative process privilege protects the integrity of the deliberative or decision-making processes within the agency by exempting from mandatory disclosure opinions, conclusions, and recommendations included within inter-agency or intra-agency memoranda or letters. The release of this internal information would discourage the expression of candid opinions and inhibit the free and frank exchange of information among agency personnel.
What I have reproduced in this article are the items that were overlooked for 4; however, I didn’t see anything that would really fall under 5. If there was something that would be redacted due to 5 it was more than likely in the support letters that were highly redacted that I have included at the end of this article.
First off, let’s go over the funding.
As for the discrepancy in the amount, the full grant is $150 million, but $6.4 million was awarded to their subcontractor, Argonne National Laboratory (ANL). This is one of the reasons a few of us believe ANL will be co-locating at the facility with a lab, possibly a satellite of ReCell. As for the difference between the government share and the obligated amount, that is more than likely the difference between what is being obligated now and what has been reserved for the grant. The amount may eventually include that additional $20 million based on progress and the political environment in Washington D.C. The outlayed amount is current as of August 12, and that is the funds the company has received.
The documents do have the budget periods in them. Of course, what is in each of these budget periods is unknown, as they are redacted. But we are able to get a basic timeline for the project.
These are the only items not redacted and most likely are the current or finished tasks:
Task 0.0 - Project Management and Planning:
The recipient shall develop and maintain the Project Management Plan (PMP). The content, organization, and requirements for revision of the PMP are identified in the Federal Assistance Reporting Checklist and Instructions, which can be found in the award attachments. The recipient must add an Earned Value Management Plan (EVMP) as an appendix to the PMP. The recipient shall manage and implement the project in accordance with the PMP.
Task 0.1 - Kick-Off Meeting:
The recipient will participate in a project kickoff meeting with the DOE within 30 days of project initiation.
Task 0.2 - Community Benefits Plan:
The recipient will execute activities with the community as defined in the Community Benefits Outcomes and Objectives attached to the award.
Task 0.3 - Cybersecurity Plan:
The recipient will execute cybersecurity related activities in accordance with the cybersecurity plan developed for the award.
With these documents we also have a better idea of where the facility will be built and know that it will be a greenfield site, not a co-located or brownfield site.
This proposed commercial scale battery recycling facility is a greenfield project that will be constructed at [REDACTED]
And:
proposing a new greenfield battery recycling facility in close proximity to several of its new battery manufacturing and automotive OEM partners
And:
Within this proposed project, the ABTC site in [REDACTED] would be converted from an unoccupied greenfield site into an operating commercial scale lithium-ion battery recycling facility.
Of course for each of those the location was redacted but in another document we have this:
proposes to construct a commercial scale lithium-ion battery recycling facility near Spartanburg, South Carolina to process battery materials from its battery manufacturer and automotive OEM partners into battery grade critical battery minerals including nickel, cobalt, manganese, copper, aluminum, and graphite for resale back to its partners in the domestic-US closed-loop manufacturing supply chain.
And:
This proposed new construction greenfield recycling facility near Spartanburg, SC will utilize these proven technologies in a commercially profitable site that is strategically aligned in both scale and location with ABTC’s commercial battery manufacturing and automotive OEM partners in order to implement a set of domestic closed-loop operations
Many of us were close when we guessed it would be in the Greenville area of South Carolina. Spartanburg is about 30 miles away. However, this table and the redacted address lead me to believe the site has already been selected and just needs to be finalized. Hopefully they were not counting on the Fernley property sales, which just fell through.
The documents also says that they are in negotiations for more material than can currently produce, they also state they have offers from 3rd parties that are willing to help take on the financial burden for additional lithium-ion recycling sites.
ABTC is already under contract or in negotiations for more feedstock than can be processed in its current recycling facility near Reno, NV. With the support of this DOE funding, ABTC is proposing a new greenfield battery recycling facility in close proximity to several of its new battery manufacturing and automotive OEM partners [REDACTED]. ABTC has received several offers for funding of this capital project if DOE funding is also secured. We also have follow-on proposals and funding support for additional facilities located geographically with additional partners throughout the US.
We even get a ballpark amount in additional funding from OEMs:
ABTC also has offers for up to $200M in project financing specifically for this proposed commercial scale battery recycling facility should this DOE support be provided for this construction effort.
Some information on thier budget strategy:
The scale-up of our recycling operations to an even larger-scale commercial facility is already a core aspect of the company’s business plan. As such, ABTC has already prepared its current cash balance and funding strategy to be sufficient for a 60% cost share of this $375M project over the course of 48 months.
Of course, one of the key components to financing is and will continue to be shares:
As a publicly traded company, ABTC is able to easily access the public equity markets to raise additional funds through share issuances as needed. ABTC has an approved active $250M shelf registration in place, which allows ABTC to raise funding through the equity markets as needed. On top of this, ABTC currently has contracted agreements in place for $50M worth of convertible notes that can be used to fund capital projects such as this proposed commercial scale battery recycling facility.
There were also the typical partnership references with no names, but since this is a federal document, it supports the statements Ryan Melsert, the CEO, has made publicly. An interesting side note: the number of companies outside those producing CAM for their own cell production lines can be counted on just a few fingers, and one of them will be Redwood Materials.
ABTC already has partnerships with downstream customers who are some of the only companies in the world that operate cathode facilities in the US. As such, these critical minerals produced by ABTC can be immediately returned to domestic-US suppliers and integrated into domestic vehicles.
This was included and mentions customers, but it is referring to the United States Advanced Battery Consortium LLC (USABC) grant that was awarded to the company so they could demonstrate how recycled material can be as good as, if not superior to, virgin-sourced material while also being cheaper. There has not been an official announcement about the status of this grant for sometime, but based on this language, it was successful.
ABTC has demonstrated this set of processes to several corporate partners and strategic customers (BASF, General Motors,Ford, Stellantis, etc.) over the past three years, and now has an operational commercial scale facility near Reno, NV employing these technologies.
There does seem to be an indirect connection to BMW. While I knew of Clemson, I did not know they were a sponsor:
BMW-sponsored Clemson University International Center for Automotive Research (CU-ICAR)
This also creates a rather roundabout connection to AESC as well, but for now that is only held up by tinfoil.
And of course there has always been some ambiguity when it comes to the role BASF plays. This is the first time I have seen them use these terms when describing their relationship with BASF.
As a result, the critical minerals produced by this recycling facility are in extreme demand within the US. ABTC is proud to already have an offtake agreement in place for its recycled critical minerals with one of the largest customers within the US, BASF.
Normally, the company only refers to them as offtake partners or feedstock partners. This is the first time I have seen them use the actual term “offtake agreement.”
In July 2023 BASF and ABTC entered into a strategic partnership agreement which designated ABTC as BASF's battery recycling partner for all of North America
It was released ABTC were part of a consortium that included BASF a cell manufacturer and a pCAM producer, but this is the first time I have seen them use the phrase “all of North America.”
As for any kind of indication of who the offtake partners are, this is as close as we get. We can assume that before the black highlighter was used one of the logos was BASF:
Rarely does the company mention competition. When they do, it’s usually in the investor deck comparing their platform to others, so while brief, this type of language is out of the norm for them.
The target customers for the battery grade nickel, cobalt, and manganese products from our proposed battery recycling facility are cathode active material (CAM) manufacturers, while the graphite, aluminum, and copper products are purchased by battery cell manufacturers and metal refiners. ABTC will compete with two categories of producers: (1) primary (miners), and (2) secondary (other recycling facilities).
Now for the number crunchers, the majority of the numbers besides the typical industry amounts were redacted but this was still there.
Some selected production costs are below. ABTC view these as the high-end of our expected production costs over time:
Nickel: $12,000 per tonne (global marginal cost of production >$18,000 per tonne)
Copper: $4,300 per tonne (global marginal cost of production >$5,000 per tonne)
Aluminum: $1,800 per tonne (global marginal cost of production >$2,200 per tonne)
If they can come close to the numbers in the grant documents, the higher-than-normal COGS they have now should not continue.
This is the first time also I have seen an estimated output for the facility.
The end technology deployed through this project will be a battery recycling facility that manufactures large quantities of recycled battery grade critical minerals, including enough nickel, cobalt, manganese, copper, aluminum, and graphite to produce approximately 800,000 electric vehicles per year.
For 800,000 vehicles, assuming an average battery capacity of 60 kWh, the total energy capacity would be about 48 GWh. If the fleet consists of BMW i4 models with a capacity of 81.3 kWh (useable) each, the total would increase to approximately 65 GWh, which seems rather high for just 100,000 tpa of feedstock. Those kinds of numbers would require production scrap, suggesting they have several OEMs most likely using a tolling model.
Tolling is an arrangement where one company processes or manufactures materials on behalf of another, typically charging a fee for the service rather than owning the raw materials or finished products. This model would be the most logical if the company, as stated several times in grant application documents, is building this facility to geographically co-locate near OEM partners.
There is a small section that is mostly void of black highlighting, and it is primarily industry research where the company addresses the different high-value products they will recover beyond lithium.
Nickel
One of the largest critical minerals produced by this recycling facility is battery-grade nickel. Nickel production today is dominated by Indonesia, China, the Philippines, Russia, and Australia. McKinsey predicts nickel demand will double through 2031, driven by growth from battery applications. Many new, low-cost nickel mines in Indonesia are funded by Chinese companies utilizing state-of-the-art technology and operate without the same environmental or labor standards as western miners. Over the last few months, the market has seen many western supply curtailments as a result of this surge in low-cost Indonesian supply. At today’s prices of $18,000 per metric tonne, the value of the US market is nearly $4 billion per year.
Cobalt
Approximately two-thirds of mined cobalt comes from the Democratic Republic of Congo - much of which is refined in China. Approximately 65% of cobalt demand today is battery related. According to McKinsey, cobalt demand is expected to nearly double by 2031, primarily due to growing demand for battery applications. The US mines <1% of the world’s cobalt. US cobalt consumption is ~6,700 metric tonnes per annum. At today’s prices of $30,000 per metric tonne, this market is valued at ~$201M per year.
Manganese
Manganese production is concentrated in South and Central Africa, Australia, and China, which together account for more than 85% of global production. The US does not currently produce manganese and is reliant on imports for 100% of consumption. Manganese is used primarily in steel-related applications, as well as in lithium-ion batteries, animal feed, and fertilizers. The US consumes approximately 890,000 metric tonnes of manganese per year.
Copper
Copper - especially critical to the energy transition, with >70% of demand from electrical related applications - counts the Democratic Republic of Congo (3rd), China (4th) and Russia (7th) among top sources of mined supply. The US mines <6% and refines <4% of the world’s copper. According to McKinsey, global electrification will increase annual copper demand to >36 million tonnes by 2031, from ~25 million tonnes today. Avoiding this deficit will require a staggering figure of between $250 to $350 billion in cumulative capital expenditures by 203011. The US consumes ~1.9M metric tonnes of copper per year. At today’s prices of $9,100 per metric tonne, the US industry is valued at ~$17.3B per year.
Graphite
Natural graphite production is dominated by China, at 77% of the global total. China also refines >90% of the world’s graphite. In 2023, the US consumed ~76,000 tons of graphite (worth ~$180M). The US does not produce any natural graphite. In October 2023, China announced graphite export restrictions and new permitting requirements to protect national security, which was largely seen as a rebuttal to US and EU discussions about critical minerals security, and the EU’s consideration of import tariffs on Chinese electric vehicles.
This brief paragraph at the very end of the document, Commercial Scale Battery Recycling Facility for the Manufacturing of Domestic Critical Minerals, is a tad bit on the propaganda side, but with a name like theirs and the current administration, they should flaunt it.
This is also one of the reasons projects like ABTC’s are being prioritized by the State of South Carolina.
Staying true to its name, American Battery Technology Company prioritizes American-made services, materials, and labor for this project. High-value construction materials like structural steel, mechanical ducting, process piping, and electrical cabling will be sourced primarily from the U.S., with a focus on South Carolina suppliers to support local economies.
Those are the main items of interest; much of the rest that is not redacted is the same boilerplate language we have seen before. As for the actual documents, the investor who obtained them does not want to deal with the hassle of uploading and hosting them. More importantly, while the government bureaucrats who did the redactions were thorough, some company-related information, IP addresses, and personal data of employees were still included. For this reason, and the simple fact that I do not feel like editing the documents myself, I agree with the investor who made the FOIA request and do not feel comfortable sharing the documents either.
I suggest someone from the company review the documents again to ensure these items are properly redacted before any further distribution.
Here however are few of the support/commitment letters, and one from ANL giving itself permission to proceed with the project.
But if you are curious about what is in all of the documents, and honestly there is not much more than what you would find in the company’s investor deck, I suggest you do your own FOIA request, but be prepared for pages and pages of this. Just as I said, I do not want to be responsible for releasing private information.
DISCLAIMER: This article should not be construed as an offering of investment advice, nor should any statements (by the author or by other persons and/or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for educational purposes only. The author did not receive compensation from any of the companies mentioned to be included in the article.
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Thank you, Mith, for your incredible DD. I’m still trying to process everything and put some things together. Will have some questions for you.
Mith Thank you as always for all of the DD and info