Proactive Investors | 20 April 2022 | Susanne Nelson
Lithium Australia NL (ASX:LIT, OTC:LMMFF) has snapped up the last 10% of battery recycling company Envirostream, the only accredited B-cycle entity to operate battery collection, sorting and processing services in Australia.
Lithium Australia managing director Adrian Griffin said: “By acquiring the final 10% of equity in Envirostream, the company now has full ownership of this strategic asset.
“As Australia’s only EPA-permitted and licensed recycler of mixed batteries, including lithium-ion batteries, Envirostream is well-placed to keep spent batteries out of landfill while providing as much sustainable feed material as possible for the manufacture of new lithium-ion batteries.
“This is particularly important in the current climate of supply shortages and surging prices for battery minerals.”
Sustainable solution to surging demand
Envirostream recently launched its second permitted battery recycling centre, which offers a sustainable supply of critical battery materials in a climate of supply shortages and high commodity prices.
“To meet surging demand, Envirostream is also planning to expand its activities into key population centres on Australia’s east coast, as well as offshore,” said Griffin.
Since the introduction of B-cycle – the Australian government-backed battery recycling scheme (BSS) developed by the Battery Stewardship Council, which kicked off in January – Envirostream has reported an increase in its collection and processing of spent batteries.
The B-cycle scheme encourages consumers to recycle batteries at various collection points, with rebates provided to battery collectors, sorters and recyclers that assist in the reduction of battery waste.
Envirostream holds a unique advantage when it comes to the B-cycle scheme, being the only accredited group operating across all three collection, sorting and processing divisions.
Proposed rebate rates for battery collection, sorting, and processing are predicted to lead to a further increase in revenue for this developing business.
Bunnings Group Limited (‘Bunnings’) has executed a Supply of Services Agreement – Battery Stewardship Scheme (‘Agreement’) with Envirostream Australia Pty Ltd (‘Envirostream’) for the collection of spent batteries from its stores in Australia and selected stores in New Zealand.
The Agreement – reached in anticipation of the launch of the Battery Stewardship Scheme (‘BSS’) to be rolled out by Australia’s Battery Stewardship Council (‘BSC’) in early 2022 – will continue until 30 June 2024.
Bunnings has the option to extend the Agreement for a further 12 months
Implementation of Agreement
Lithium Australia NL (ASX: LIT, ‘the Company’) has a 90% ownership interest in Envirostream. The Company wishes to advise completion of the Agreement, a contract between Envirostream and Bunnings that allows for provision of services by Envirostream to begin immediately. Envirostream has already trialled its spent-battery collection services in several Bunnings stores within Victoria.
In preparation for the BSS, Bunnings and Envirostream have worked together to ensure drop-off points for spent batteries within the Bunnings infrastructure are not only convenient for customers but also facilitate efficient spent-battery collection by Envirostream.
Agreement terms
The Agreement runs until 30 June 2024, at which time Bunnings has the option to extend it for a further 12 months. Envirostream will provide a Battery Product Stewardship Program (‘Program’) at all relevant sites across Australia and New Zealand.
The Program must incorporate all the requirements of the BSS for managing every type of battery covered by the BSS (‘Services’).
The Services include, but are not limited to:
provision and maintenance of suitable collection units for spent batteries;
collection and transportation of spent batteries from all Bunnings sites;
recycling of the spent batteries collected from Bunnings sites;
education and participation in marketing campaigns, in conjunction with Bunnings, and
reporting.
The BSS is currently anticipated to be operational from 1 January 2022. Service fees and service rebates for Australia are linked to the expected rebates payable on a per kilogram-collected basis from commencement of the BSS.
Basel Import Permit AUH21-020
The Australian federal Department of Agriculture, Water and the Environment recently issued Envirostream with a Basel Import Permit, which allows for the import of 100 tonnes of mixed-waste batteries into Australia from New Zealand. The permit, which allows Envirostream to service the Bunnings’ New Zealand stores, is valid until 14 October 2022. Once imported into Australia, the waste will be recycled at Envirostream’s EPA-licensed Campbellfield facility and its Laverton North facility, which is currently in development.
Comment from Lithium Australia managing director Adrian Griffin
“The Company is pleased to announce that Envirostream will commence a service contract with Bunnings, which is leading the way in the provision of convenient collection points for spent batteries ahead of the BSS. The creation of such a collection infrastructure is vital to improving Australia’s battery recycling rate and preventing spent batteries from being consigned to landfill.”
The Company requests that the trading halt be lifted.
Hume City Council has issued a planning permit to Envirostream Australia for its battery recycling facility in Campbellfield, Victoria.
The permit allows a change in land use to that of a materials recycling facility
Overview
Lithium Australia NL (ASX: LIT, ‘the Company’) has a 90% ownership interest in Envirostream Australia Pty Ltd (‘Envirostream’). As outlined in the ASX release dated 5 October 2021, a change-of-land-use application for Envirostream’s activity site in Berwick Road, Campbellfield, Victoria was in progress at the Hume City Council (‘Council’). Envirostream is pleased to advise that the planning permit the subject of that application has now been received.
Resource recovery
Envirostream – whose activities align with the Council’s commitment to infrastructure essential to meet waste and resource recovery – applied to the Council for a change in land use for the establishment and expansion of a materials recycling facility that had minimal impact on the environment and amenity of the area. Envirostream has since worked closely with the Council to ensure its operation meets the requirements of the planning scheme, and this led to approval of the change-in-land-use application. The planning permit is conditional on Envirostream’s compliance with the management plans it submitted with the original application.
Battery materials
The Hume City Council planning permit, together with the recently issued EPA operating licence, provides Envirostream with the formal approvals necessary to expand its operating throughput for the recycling of spent batteries at its Campbellfield facility.
Envirostream is the first company to achieve such approvals, which are specifically for the recycling of spent batteries. This represents an important commercial prelude to the introduction of the national Battery Stewardship Scheme scheduled for implementation in January 2022.
Comment from Lithium Australia MD Adrian Griffin
“Envirostream – now the first mixed-battery recycler in Victoria to be fully permitted – seeks to reduce the volume of waste batteries relegated to landfill as it gears up to meet the introduction of the Battery Stewardship Scheme early next year.”
The EPA Victoria-issued operating licence provides the environmental and legal framework for Envirostream Australia to continue battery recycling activities at its premises in Campbellfield, Victoria.
The licence permits Envirostream Australia to process more than 500 tonnes of specified electronic waste annually.
Comment from Lithium Australia managing director Adrian Griffin
“EPA licensing of our Victorian battery recycling facility for the next 99 years ensures that environmental safeguards are in place for the ever-increasing battery utilisation required to decarbonise the economy.
“Australia has an environmental duty of care to establish compliant recycling facilities that can safely process the expected increase in volume of end-of-life batteries, providing sustainable materials for this critically important manufacturing sector and reducing environmental pollution – the legacy of what has until now been a poorly managed industry.
“As part of the process of obtaining that 99-year licence, Lithium Australia and Envirostream Australia worked together to develop specific, in-house improvements that enhance safety in the collection, storage and processing of spent batteries and further reduce any fire risk associated with their recycling. We lead the industry in that respect.
“The roll-out of a national battery stewardship scheme that commoditises spent batteries and discourages their disposal in landfill is imminent and this will certainly increase the volume of spent batteries available for recycling.”
Introduction
Lithium Australia NL (ASX: LIT, ‘the Company’) has a 90% ownership interest in Envirostream Australia Pty Ltd (‘Envirostream’). An onshore, mixed-battery recycling company, Envirostream is unique in Australia in its ability to collect, sort, shred and separate all the components of end-of-life lithium-ion batteries (‘LIBs’), as well as single use alkaline batteries. This makes it a perfect fit with the Company’s critical battery metal-processing expertise.
In July 2019, Victoria banned the disposal of spent batteries to landfill, given that many contain toxic materials capable of polluting soil, groundwater and waterways. As the only mixed battery recycler in Australia, Envirostream is focused on diverting as much battery material from landfill as possible, as well as improving the sustainability of the industry via the creation of a circular battery economy.
The volumes of spent batteries available for recycling is expected to increase following recent announcements by the Battery Stewardship Council that it has secured federal government and industry funding to establish an accredited process for their collection and recycling. Scheduled to commence in January 2022, the Battery Stewardship Scheme will collect a levy on each new battery sold and use the funds to subsidise the collection and processing of end-of-life batteries.
Envirostream works closely with the appropriate regulatory bodies to ensure that its management systems and safety and environmental procedures exceed industry accepted standards, thereby minimising any risk to local communities. Its focus on continuous improvement ensures that battery recycling in Australia remains safe, environmentally friendly and sustainable.
Operating Licence
In 2020, using EPA Victoria’s long-route licence pathway, Envirostream applied for an operating licence for its activity site in Berwick Road, Campbellfield, Victoria. The prescribed permission activities under section 74(1)(a) of the Environment Protection Act 2017 allow Envirostream to reprocess specified electronic waste, including batteries, at a capacity exceeding 500 tonnes per year.
That licence is valid for 99 years, subject to several conditions, including the installation of thermal-imaging cameras and firewall protection systems for the early detection and management of any fire incidents that may arise. Conditions for air emission are also stipulated.
A change-of-land-use application for the Berwick Road premises is currently in progress at the Hume City Council. Envirostream has complied with all requests for information from the council and the Company expects that this application too will be approved.
Lithium Australia fortifies intellectual property protection for its battery recycling
HIGHLIGHTS
Lithium Australia has filed a provisional Patent Cooperation Treaty (‘PCT’) application, relating to the recycling of alkaline batteries, with IP Australia.
The alkaline battery separation process was used to generate samples for the 2021 micronutrient field trial programme undertaken by Envirostream Australia.
Update on intellectual property programme Envirostream Australia Pty Ltd (‘Envirostream’) is a 90% owned subsidiary of Lithium Australia NL (ASX: LIT, ‘the Company’). The Company is pleased to announce the filing of a PCT application relating to Envirostream’s recycling process for alkaline batteries.
Separation of electrode materials The PCT application – entitled ‘Process for recovering values from alkaline batteries’, with the reference Australian Provisional Patent Application 2021902192 – describes processes for the separation of electrode materials (comprising, for example, cathode material and/or an anode) from alkaline batteries.
That process was used to generate the samples applied in the Envirostream 2021 field trial programme (see ASX announcement 1 June 2021).
Comment from Lithium Australia MD Adrian Griffin “The ability to add value to spent alkaline batteries is a further demonstration of Envirostream’s leading edge in the field of battery recycling. A timely technical advance, it coincides with the introduction of the national battery stewardship scheme (see ASX announcement 6 May 2021), designed to divert end-of-life batteries from landfill, and will enhance the value of the spent alkaline batteries available for recycling.”
Envirostream Australia’s micronutrient development: expanded 2021 field trials commenced
HIGHLIGHTS
Envirostream Australia has commenced its battery-material micronutrient field trial programme for 2021.
The expanded field trial programme is targeting manganese-deficient soil types.
Two products are being assessed, based on positive outcomes of the process development for separation of manganese from single-use alkaline batteries.
Seeding has been undertaken at three West Australian sites, in collaboration with Summit Fertilizers.
One trial site in South Australia has also been seeded.
Introduction Following successful results from its 2020 field trials, which used recycled alkaline battery material as a fertilizer micronutrient (see ASX announcement 17 December 2020), Envirostream Australia Pty Ltd (‘Envirostream’), the recycling division of Lithium Australia NL (ASX: LIT, ‘the Company’), is please to advise that an expanded field trial programme for 2021 has commenced.
Collaboration with Summit Fertilizers
The Company is pleased to be collaborating with Summit Fertilizers (‘Summit’). A leading fertilizer supplier established in 1989, Summit has over the years introduced a number of innovations to the West Australian (‘WA’) market. With a highly experienced area manager network and dedicated field research team, Summit aims to help its customers use nutrients that achieve the best outcomes.
Summit has provided access to three of its 2021 trial sites, two with wheat and one with lupins, to assess Envirostream products.
The 2021 programme
The programme has been expanded to four sites in WA (three Summit sites and one dedicated Envirostream site) and one dedicated Envirostream site in South Australia (‘SA’), thereby permitting performance assessments of the recycled battery material across varying broadacre soil types. Envirostream’s micronutrients will again be agglomerated with mono-ammonium phosphate (‘MAP’) fertilizer.
This year, the number of treatments at the two Envirostream trial sites has been expanded from five (see ASX announcement 10 June 2020) to nine. It is hoped that there will be a manganese uptake response similar to or better than that noted in the 2020 trial (see ASX announcement 18 February 2021).
Both Envirostream trial sites will be seeded with wheat crops.
Treatments being used in the 2021 programme at the Envirostream sites include the following.
No fertiliser (control).
Summit MAP at two target phosphate addition rates.
Summit MAP and Mn (full compound), blended with Summit MAP, at two target phosphate addition rates.
Envirostream agglomerated MAP product 1, at two target phosphate addition rates.
Envirostream agglomerated MAP product 2, at two target phosphate addition rates.
The two Envirostream product options being used are both derived from its proprietary separation technology for single-use alkaline batteries. Any performance differences between these options will be assessed.
Blended fertilizer products are shown in the following photographs.
Seeding at the WA sites
Summit has seeded several sites, with the remaining Envirostream sites, located West of Kojonup, scheduled for seeding in early June 2021.
Seeding at the SA site
The dedicated Envirostream SA site is located between Port Wakefield and Port Broughton, towards the top of the Yorke Peninsula. Seeding there with wheat was completed on 21 May
Images of the specialised trial-seeding equipment and of trial-seeding progress at this site are shown below.
Comment from Lithium Australia managing director Adrian Griffin
“Lithium Australia and its subsidiaries are committed to providing the battery industry with sustainable outcomes. The expansion of Envirostream’s successful fertiliser micronutrient programme into 2021 demonstrates this commitment and further positions Envirostream to support implementation of the national Battery Stewardship Scheme, to ensure that as many spent batteries as possible are recycled rather than consigned to landfill.”
Envirostream is Australia’s national leader in battery recycling, providing sustainable solutions for the disposal of end-of-life batteries (‘EOL’) and the ‘rebirthing’ of the energy metals contained in EOL lithium ion batteries (‘LIB’s’). Envirostream’s Melbourne plant is the only commercial facility in the country capable of recycling all types of EOL batteries to produce a range of materials, including mixed metal dust (‘MMD’). Comprising the ‘active’ compounds recovered from EOL LIBs, including critical battery materials such as cobalt, nickel, lithium and manganese, MMD can provide a sustainable feed source for the manufacture of new batteries.
Envirostream’s LIB material recovery rate of +90% is very high compared with overseas competitors that incinerate the batteries at the commencement of the recycling process. The incineration process reduces mass yield and creates a risk of toxic atmospheric emissions. In contrast Envirostream’s low-temperature processing, unlike its competitors, recovers volatile components, including plastics, resulting in much higher mass yields and lower carbon emissions.
Victoria banned the disposal of batteries to landfill in July 2019. Many of those batteries contain toxic materials capable of polluting soil, groundwater and waterways. Envirostream, being the only mixed battery recycler in Australia, is focused on diverting the maximum amount of battery material from landfill and improving sustainability of the battery industry by creating the circular economy.
On 11 September 2020, the Company applied for an EPA Victoria works approval for one of its Melbourne premises to operate above 500 tonnes per annum (tpa) of specified e-waste due to its expected growth in both battery collection and recycling volumes. Envirostream has never operated above 500tpa of specified e-waste at any of its Victorian sites and was previously not required to hold an EPA license to operate. Envirostream notes there has been industry wide confusion around battery classifications as specified e-waste and that battery recycling is a new industry where best practice is still evolving. Envirostream has had regular discussions with regulators about its licensing requirements. Following discussion with EPA Victoria in mid 2020, the Company commenced preparing an application for an EPA license to operate a scheduled premise. The EPA has not issued Envirostream with any breach notices following its visits to the Company’s premises. The Company is currently working very closely with the EPA to demonstrate industry best practice at Australia’s first battery recycling facility. Envirostream continues to work through the EPA’s process with the view to its application for a license to operate a scheduled premise. The Company continues to operate at below the 500tpa of specified e-waste processing rate and has taken steps to significantly minimize the stock levels at each of its premises to mitigate risk.
In early September 2020, the ACCC authorised the Battery Stewardship Council (‘BSC’) to establish and operate a national stewardship scheme for managing EOL batteries. The intent is to commoditise EOL batteries: placing a levy on new batteries at the point of sale to supplement the cost of subsequent collection and recycling. Implementation of the stewardship scheme should significantly increase the volume of EOL batteries Envirostream recycles as well as significantly increasing its margins on its collection and recycling operations.
Envirostream is committed to establishing a LIB and mixed battery recycling industry in Australia which is critical to removing this hazardous and toxic waste from landfill, and returning the recovered components to the circular economy. Envirostream believes it has the safest and most environmentally sustainable solutions to the battery collection and recycling in Australia and is also a global leader on closing the loop on battery materials.
Safety in battery collection, transport and recycling
2020 YTD
Industry Benchmark
Lost Time Injuries (LTI)
0
n/a
Lost Time Injury Frequency Rate (LTIFR)
0
10.7
Envirostream is pleased to report that during the 2020 calendar year it has not had a single LTI since Lithium Australia acquired its controlling interest in November 2019. Envirostream has now gone 14 months since its last LTI.
Envirostream does note WorkSafe Victoria has visited Envirostream’s premises on a number of occasions to inspect the Company’s safety practices and has issued the Company with a number of improvement notices. All of the improvement notices have now been actioned by the Company.
Envirostream’s safety culture is a high priority for the Company and it continuously reviews its safety procedures and systems with a view to keeping all its stakeholders safe and improve on its safety record.
Envirostream has been developing industry wide improvements to ensure safety improvements in collection, storage and processing of batteries and to further reduce associated fire risk. During the time Envirostream has been collecting and recycling batteries, it has become apparent that one of the highest fire risks is the incorrect packaging of EOL mixed or lithium ion batteries at collection locations. Whilst Envirostream cannot control the battery packaging from externally managed collections, a number of mitigating strategies have been implemented by the Company at its facilities to reduce the likelihood of a fire, including:
installation of an early heat detection system and fire detection alarms to its recycling facility with site continuous monitoring,
the storage of mixed battery types has been changed from steel to plastic containers, with LIB’s processed as a priority to minimize inventories of dangerous goods,
significantly increasing its mixed battery sorting capacity to allow the safe storage of LIBs,
following EPA Victoria guidelines for management and storage of combustibles recyclable and waste material,
process equipment modifications, which include additional cooling water points, procedural changes to safe operating practices and additional operator training to reduce fire risks, and
actioning risk mitigation advice from Fire Rescue Victoria.
The biggest challenge for Envirostream is handling mixed batteries collected from its network of collection points. It’s clear that sorting and separation of battery types at these collection points will be difficult if not impossible given the wide range of battery types and the confusion this generates.
To mitigate the risk of an incident, Envirostream has commenced research and development of fire-resistant collection containers for roll out in its network. Significant effort has gone into designing fire resistant collection boxes, bags, crates and containers to reduce the fire risks associated with battery collection and storage.
Photo 1: Fire resistant bags and container to minimize fire risksPhoto 2: Fire resistant bags and container to minimize fire risksPhoto 3: Battery storage boxesPhoto 4: Secure battery storage boxesPhoto 5: Class 9 battery storage and transport stillage
It is important to note that there are no other EOL mixed battery shredding and processing facilities in Australia and with lithium ion batteries becoming part of everyday activities, there is a growing need for the industry to continue to evolve to manage this constantly increasing hazardous e-waste stream and fire risk.
Envirostream will continue to improve its own collection network and will continue to work on improving and leading the industry in this area through its affiliation with its existing suppliers and the Australian Battery Recycling Initiative.
Envirostream has begun identifying additional storage, sorting and recycling sites to expand its operations nationally as EOL battery volumes are expected to grow significantly. The Company has also begun a process to partner in additional recycling facilities in other priority jurisdictions around the world.
Envirostream continues to work very closely with the regulatory bodies to ensure its management systems, safety and environmental procedures are better than industry accepted standards and to minimize the risks to the local communities. Envirostream is focused on continuous improvement to ensure its battery recycling in Australia safe, environmentally friendly and the most sustainable practice.
