Member Info for Lance.Johnson

I have been getting many questions about lithium recycling and especially TM1 so I return to share insights. I will not stay around to take questions as I am too old and too retired.

I see that TM1/Recyclus will be producing 50 tonnes of black mass per month, roughly 600 tons per year. Previously I and others who looked at the Recyclus system said it is too small to be making the thousands of tonnes cited in early communications to investors. The offtake agreement of 50 tons of black mass per month is consistent with our earlier comments. Unless there is a second plant we do not know about the max they can make is 500-600 tons p.a.

As for the economics of this operation, all lithium battery recyclers are struggling. BASF in recent days announced that they will not proceed with the planned recycling plant in Spain. In total I have visited 60+ fully operational lithium recycling plants all over the world. So far I have only ever seen two recyclers who are profitable. I am not counting the Chinese, not because I cannot trust their economics but because the Chinese are working with lithium iron phosphate chemistry mainly. Iron phosphate is by far the most difficult to recycle economically because of high iron content which is cheaper to make new. What I am trying to say that I compare apples with apples when I say the TM1 system will struggle to provide any decent return. Bigger and smaller companies than Recyclus are failing and thats a fact. The two profitable recyclers that I have seen have both recycled lithium batteries for 10+ years, starting with portable and expanding to electric vehicle.

The quantity of black mass Recyclus makes is not consisted with earlier communications about planned capacity. I was also told but I cannot find references to this fact that they have recently invested in a discharging system for lithium batteries. Operationally this is good news but if this is the first discharging system they have invested in 2+ years after they opened the doors then they must have known all along that they have no chance of meeting the capacities mentioned in their early communications.

I am puzzled by the alleged recovery of 47% cited in their reports. Around 90% of the systems I have seen comfortably do 90%+ recovery. I am aware of around 5 systems that do 95% or higher. At 47% recovery this seems like a DIY project.

Finally I want to comment on messages I have seen questioning the ownership structure. I refer to people asking about the fact that Recyclus is not owned fully by TM1 while investment into TM1 is used to buy assets for Recyclus while the Directors of both companies are the same. From what I recall when I first did due diligence on this company it is even more messy because the same Directors also own another company Halo Battery Recycling that might have ownership or control of some of the assets. See https://find-and-update.company-information.service.gov.uk/company/13165467

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The lead battery recycling plant is not a lead battery recycling plant. It is a battery breaking machine. These machines can be purchased and have been around for many decades. The machine at TM1 and Recyclus does not actually recycle lead batteries. All it can do is break the battery and separate components to be handed over to the recyclers. The team at TM1 does not seem to understand that without downstream processing they cannot make money from this machine. In the early communications to investors they were saying that this machine will make a lot of money but this is only because they did not understand the supply chain and business. The machine has been operational for some time and the fact that we have not seen any impact proves this.

I and others have said in the past that TM1 would need a very sophisticated desulphurization process in order to deal with the lead battery components downstream. These cost millions of dollars to deploy and TM1 does not have access to one. Bizarrely, not long after we criticized their plan for lack of desulphurization they announced in the public markets that they have filed a patent for a desulphurization process. We will find out soon enough when the patent application is published, but knowing what we know about this industry the description of the alleged technology is suspicious as it makes references to the work of other known people in the field. My client told me that TM1 had attempted to secure patent rights from 3rd parties but having failed to do so they filed their own patent applications. I will revisit this when the patent specifications are in the public domain.

I cannot find the reference but I recall a reference to the lead battery breaking plant as being a first in the UK. Far from it as Ecobat automates roughly 90,000 tons per year and Envirowales at least 50,000 tons. Even if all this capacity was diverted to TM1 it would not be enough to satisfy their outlandish claims.

I was not impressed by the communication “technology minerals hails lithium recycling subsidiary’s progress” because the photograph they show is a lead acid battery breaker, not the lithium plant. Misinformation.

At a market cap of roughly 16 million at the time of writing the company seems to be significantly overvalued based on claims of operations, capabilities and proprietorships that are either untrue or which cannot be substantiated.

I’m a retired battery professional with decades experience in lead-acid batteries. Since around 2010 I have also been looking at hydrogen, lithium battery chemistries and more recently neodymium and solid-state. My clients are family offices and venture capitalists who normally recruit me for due diligence on the technology and manufacturing.

I rarely share information in the public domain, but one of my clients cited this forum. TM1 has surprised me for all the wrong reasons and I have decided to share some of my opinions.

First and foremost my clients asked me to verify claims about the UK Wolverhampton capacity. Some of the material I was referred to indicate 8,300 tons per annum on single shift. The reality seems very different. The shredder commissioned through a local company called e-toro based in the West Midlands cannot process anywhere this this capacity. My estimate is that this plant can process around 10% of the advertised capacity. The other issue is that the plant is not capable of processing electric vehicle battery packs. Based on what I have seen they can do portable batteries at best. To give them the benefit of the doubt there may be a plan to process cells rather than modules or packs at the facility but I have seen no evidence that the type of electric discharge and dismantling systems and know-how can be found in TM1 or Recyclus. But as I said earlier it’s the capacity that worries me the most as it is nowhere near the advertised or claimed potential.

Based on my knowledge of shredding, separation and processing systems relating to lithium-ion, I cannot see anything novel when it comes to the TM1 or Recyclus plant. Maybe the nitrogen blanket is novel but I cannot see any remarkable benefit in this approach. The nitrogen blanket prevents fire or explosion of the components during processing but from what I have seen this is an experience and not particularly eloquent way to solve the problem. Some companies can extract well over 95% of materials by processing the cells without protective atmospheres or gas blankets. Some are able to distil the electrolyte and destroy the binder using low-cost thermal processes without the need for expensive gases.

One of the outlandish claims that bothers our industry the most is the quote that TM1 or Recyclus is first to operate in the UK. I cannot draw any conclusion other than misinformation whenever I see this claim. RS Bruce has been around for a long time and have been processing lithium batteries since before COVID19. Cawleys is another example. RS Bruce and Cowleys are doing it right and have been for some time. TM1 talks about it but they have not started any serious operations.

To be continued by reply to the original as I have run out of characters.

@NewInvestments
I am not so sure about the being given the thumbs up to mine anything in Cameroon. From my experience in Cameroon the mining permit is governed by Law No. 2016/017 (14 December 2016). I do not think such a permit has been issued and these are notoriously difficult to get by the way.
Most mining in Cameroon is dominated by Chinese companies but it is possible for anyone in theory to prospect. Mining companies are adviced to do 2 month prospection I think in order to spot precise locations of interest before investment and excavation begin. Only once a very positive prospection report comes back it is possible to apply for the mining permit and I know many companies who were sabotaged at this stage so that other favored companies could step in and excavate on their behalf. If TM1 got the thumbs up for anything it is most likely to prospect not to exploit but I stand to be corrected.

@Bluesky2033
I will comment only on one specific point which I am qualified to comment on and that is recycling of the "first 19 tons of lead acid batteries".
A lead battery contains around 70% lead and the rest is acid and plastic. When the battery is broken out and the acids decanted it is possible to remove plastic leaving behind the lead. The lead is made up of two types as I said in my previous messages on the board: solid lead metal or lead alloy and wet lead which are otherwise known as lead salts.

If 19 tons of lead were produced then it means around 27.1 tons of lead batteries were processed because 70% of 27.1 is roughly 19 tons. This is a very small amount of lead. If the plant processed this amount of batteries each day it would be less than 6,000 tons annual capacity. I can only guess that the 19 tons were produced as part of a pilot.

In theory this lead should sell very quickly but there is a catch. Smelters are hesitant to offer a premium for lead as I said in a previous message because when you break the battery and get the lead out you are essentially eating into their profit margins. So I guess the smelters are not offering TM1 a good enough price for this lead which is why they have not updated investors, maybe they are still looking for a party to buy the lead at a reasonable price. The moral of the story is that it takes more than a permit to make revenue and being a processor (NOT a recycler) is not as privileged as many think. TM1 do not actually recycle batteries, they break the batteries and separate components and then they give these to recyclers to process.

@LoggyLogbot
My comment on successful precedent relates to lead acid batteries as in separating lead alloy or grid from lead salts. The "Battery Recycling Scale Up Facility" you refer to is for a lithium battery recycling project not lead acid. I believe the facility is in Warwick as in the Warwick Manufacturing Group which is a great facility from what I hear available for any company wanting to do scale up or manufacturing trials.

@AndyOzwald
Im a new user if thats what you call them. I did some due diligence on TM1 for a customer and decided to post information on my own accord. My motivation is what I consider hair raising market ignorance by TM1. Im not smart enough to be an investor in this or any company. I make a living as a retired consultant for the battery world.

@marty_mcfly
First and most important, +1 for your nickname.
Second, just want to quickly go over a very interesting point you made about black mass. In todays market we have an over-capacity of up and coming processors. Not recyclers, processors. The difference is this: a processor will process the waste battery and break it down into components including valuable black mass. And the recycler will take the black mass and convert it into products that are ready to re-use in manufacturing. Sometimes processors and recyclers are one and the same. Sometimes they are different entities. I have also seen situations where they are different entities legally but owned by the same families. From my experience anyone producing black mass today can sell 100% of it. Sometimes few questions asked. I have seen situations where they sell 200% of it. I am not joking with you, what I mean is that some companies have double sold their capacity for the next 12 to 24 months at a fixed price in order to make sure that they, not the competitors, will buy the black mass. This is because as I said we have over-capacity in up and coming recyclers but the devil is in the detail. Most of the available capacity today is to REFINE the black mass not to MAKE the black mass. So anyone making the black mass will be able to sell it. In that regard I am neither surprised nor impressed that TM1's black mass is sought after.
My worry with this business is the long term strategic model. Battery chemistry is changing fast and so is the black mass. Also the way batteries are produced keeps changing. In the UK the situation should be no different than the rest of the Western hemisphere. If a battery is cheap for example lithium iron phosphate, over time the manufacturers will favour it because cheap battery equals more market penetration. However cheap battery also means very little if any profit on recycling. The more expensive batteries contain critical metals like cobalt and nickel. If the battery is expensive the market penetration could grind to a halt, but if the battery is expensive at end of life it will be more profitable to recycle. TM1 as a company without its own IP or knowledge of market specifics like this will be caught as we say in America with its pants down. Final point to make is that one day in the future the sands of power will shift and recyclers and battery manufacturers and their gigafactories will control the flow of feedstock. TM1 is not the only company doing what TM1 is doing, there are many more everywhere in Europe but TM1 is more in the public domain because they are public. Most of them will fail, we have seen the same situation with the lead battery industry.

The question is where TM1 will exist as a business when these things unfold. They may succeed, they may not. From what I have seen so far I am not impressed by lack of market knowledge.

@SeagullsFan

TM1 have NOT patented any such process. Also, there is almost nothing new at all when it comes to producing black mass form mixed lithium battery waste without manual intervention.

The recycling process for lithium batteries involves multiple stages. First the battery pack, if dealing with electric vehicle batteries, must be dismantled and discharged. Discharging is also known as stabilisation and can be done in multiple ways including like immersion in liquids; thermal systems; cryogenic systems; and smart electrical systems. The cells are then shredded but this strategy is generally very bad, unfortunately there is no better way to do it at the moment. When shredded the anode and cathode mix together with the current collectors which are made from copper and aluminum typically. You then need to use physical processing systems to remove physically the plastic, current collectors and as much of everything leaving behind the black mass. I could name you 20+ companies that have developed and commercialised such systems and I have personally visited more than 10 for due diligence for my clients.

As for refining the black mass from my due diligence I would say that direct recycling is rubbish and will never work for a general recycler. It will work for gigafactories recycling their own scrap but never for the general recycler. This is because direct recycling takes cathode from old batteries and refreshes it for use in new batteries. The trouble is old batteries made 5 or more years ago cannot yield cathode that is relevant and useful for todays batteries.

Anyway there are no patents or IP as far as I have seen at TM1 but maybe there is a technology licence. They are a public company so I imagine if they had a significant licence they would have been shouting about it.

@Moopoo @Da_MoLe

One such company in the UK is Halo. Halo is owned or controlled by TM1 and Halo purports to have a workforce in recycling. Da_MoLe correctly speculates that this is one strategy the company can use to build access to workforce.

However when you look closely the same people are running both companies. Or rather all companies. It is mainly Alex Stanbury and Robin Brundle. Recyclus owns shares in Halo and TM1 owns shares in Recyclus but last time I checked the Directors themselves Robin and Alex own shares in all companies. I dont know how agreements and contracts are being negotiated between the companies given that all are controlled by the same individuals.

I posted earlier a thread "my concerns with TM1". For the record when we did due diligence on the team across the company we found out that two of the Directors at Halo have criminal records. One has a suspended prison sentence that was handed down in the last year or two.

I am not convinced by this strategy. If the company does go ahead and receive its permit to operate the breaker I doubt they would secure enough waste batteries at a reasonable price. Getting feedstock at the wrong price is easy and this is the problem almost every other scrapper will have these days. As for claims made by TM for hydro processes to recover 99.99% lead salts, these statements seem misleading in my opinion because the market for these products is questionable.

I am aware of several companies in Europe working on hydro solutions for 99.9% recovery of oxide. Putting these oxides into new batteries is very difficult. I was involved in testing with 3rd parties and have yet to see a real solution in this space. What TM1 refers to in the web page is a bit of a holy grail which is not as obtainable as they make it seem. I have seen data produced by other companies and while some results are promising there are only few companies that have sufficiently advanced such technology and NONE are commercial. I reached out to all companies that have good results in this space and none of them seem to be working with TM.

During my due diligence we also found other problems. For example we saw that TM made it seem as though they control affiliates like Recyclus, but in fact TM never had a controlling interest. This is public information now and I believe these problems have been more or less corrected, but at the time that I did my due diligence it was not clear what the situation is. The fact that Alex and Robbin were directors in all companies seemed like a strange set-up.

Alex’s and Robbin’s track record which includes Century Cobalt raises some concerns in my opinion. We became aware during our due diligence of prospecting projects in the US and an attempt to do business in the cannabis space https://www.proactiveinvestors.co.uk/companies/news/944757/cannabis-firm-block-commodities-inks-purchase-deal-with-ohio-seed-bank-944757.html At one time there were communications relating to blockchain technology and a reverse take-over involving a cannabis producer in Africa.

I saw some pertinent questions asked by other users in these forum. Questions around IP and the team. I hope the above is helpful in the current context.

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Looking at the pictures in the public domain the TM breaker does not look sophisticated to me. Breakers I have worked with in the 90s seem more sophisticated to a degree. I have doubts that TM’s machine can do what it says on the tin but lets assume it does and that metallics and salts can be effectively separated.

Some of the smelters I have worked with over the years not only recycle their own batteries, they also manufacture batteries. This is a key point. Whether or not it makes sense to separate metallics and salts depends on what you are planning to do with these. I have serious doubts that team TM understands this.

If a smelter drops the metallics and salts together in a furnace, additives and air scrubbers are essential. Sometimes due to environmental concerns a smelter chooses to separate the metallics and salts. In these cases the salts are treated with caustic chemicals which comes at a significant cost. This is a cautionary tale because many of my employers and clients have lost money by separating and treating the metallics.

The troubled recycler Recylex S.A. did not look for high separation between metal and salt in some of its plants because it was economically pointless. Others just didn’t use their breakers because they realized would lose money by breaking. I cannot find any significant precedent for scrappers that successfully separated metallics and salts to achieve good economics. What I mean by a scrapper is a company that collects and breaks batteries, but does not recycle them. In other words exactly the sort of company TM aims to be.

TM will presumably sell the lead metallics and salts to a 3rd party who will smelt them. The economics of this strategy are highly questionable. I have seen this work well for companies that not only recycle but also manufacture batteries. TM is no such company. I am not sure that the TM breaker can do what it says on the tin and even if it could, separating metallics and salts is unlikely to deliver an economic benefit. I have dealt with smelters for decades and let me say this to you: they are very unlikely to pay a premium in today’s market for the kind of products TM is looking to make. Smelters make more money from recycling waste batteries than from buying pre-treated metallics and salts from scrappers. TM's strategy was more likely to work before COVID but even then it would require careful planning and execution.

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I do not have a position in TM1, but I have 30+ years experience in flooded and AGM lead battery manufacturing and recycling. I did some due diligence for a customer recently and I am troubled by what I saw at TM1.

My due diligence started in April 2021. My client showed me this link from Yahoo Finance: https://finance.yahoo.com/news/lead-acid-battery-breaker-contribute-143100617.html

At first I thought TM1 can't tell the difference between lead and lithium batteries, because the article shows a LEAD battery breaker and says it will “contribute towards greener electric car batteries”. After reading more of the company’s communications I realized that the CEO, Alex Stanbury, is deliberately convolving lead and lithium. For example in the same article Alex says:
“The demand for high quality resources will only grow as the demand for electric vehicles and parts does. We are confident that we will hit our goal of making the battery industry a zero-landfill sector, this plant will support our progress towards this goal”.

We reached out by calling the number shown in the link to make some inquiries and a TM representative told us that the breaker can do “both” lead and lithium. Clearly it is not the case and this has since been corrected, but I became concerned for the lay investor.

My client asked me to take a really close look at the machine. It seems that this machine is still, after all these years, the subject of admiration and hope by those invested in TM. While TM has been unwilling to disclose detailed information I have worked with battery breakers since the early 90s and I can tell a great deal by looking at TM1’s breaker images in the public domain.

To help you understand the level of crazy that we are dealing with here I will start by telling you a few things about breakers. Some of the best machines I have worked with are made in the USA and Italy. India and China also make good breakers. I have never heard of breakers made in Brazil, which is where TM claims to have sourced its machine.

A breaker’s job is to smash the battery to bits, releasing components for recycling. Three components are released: one the plastic, which is mainly polypropylene casing, two the electrolyte, which is sulfuric acid, and three the lead. The lead is actually made up of two different parts, a solid lead which comes from the grid and terminals and a wet lead which is made up of salts. The salts are also known as the paste. Normally after breaking the plastics are sent for recycling, the electrolyte is taken away and either disposed or converted to additives for the glass industry and the lead is taken through a pyro process to make bullion. The pyro process handles both solid lead and battery salts together which means there is no reason to separate the two most of the time.

It seems strange that TM opted for a breaker that separates metallics and salts.

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