Disruptive technology

Features - Scrap Metals Supplement

Aqua Metals, headquartered in Alameda, California, seeks to revolutionize the lead recycling industry with its AquaRefining process.

December 29, 2016

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Saturday, Oct. 29, 2016: This is the date Aqua Metals first produced AquaRefined lead at its flagship AquaRefinery in McCarran, Nevada, using the company’s water-based, room-temperature process.

In a news release announcing the achievement, Stephen R. Clarke, chairman and CEO of Aqua Metals, says, “This is a major milestone—not just for our company but for the entire industry. Our commercial-scale AquaRefining modules have the potential to revolutionize lead recycling and make lead-acid batteries the only truly sustainable battery technology. We are confident that our lead products will exceed the most rigorous industry specifications. I am extremely proud of our entire team for making this dream a reality.”

The company’s next step is to fully integrate the front-end battery-breaking portion of the facility with the refining portion, Clarke says.

Prior to Oct. 29, Aqua Metals had demonstrated its technology at bench scale, pilot scale and with a single, full-size electrolyzer. Now, the company appears poised to begin commercial production of its AquaRefined lead at its plant in the Tahoe-Reno Industrial Center (TRIC) in Nevada.

Aqua Metals makes AquaRefining modules at its headquarters in Alameda, California. The company has built and delivered a total of five modules to its Nevada AquaRefinery as of the end of October and plans to install and commission a total of 16 modules at the TRIC site.

Redefining lead recycling

Steve Cotton, chief commercial officer for the company, explains that in the AquaRefining process, the lead paste that is removed from lead-acid batteries is not dried as it is in the traditional recycling process that involves smelting and refining. Instead, the wet paste is pumped into digestion tanks that are filled with a nontoxic solvent. In the tanks, the lead compounds in the paste are dissolved in an electro-chemical process, and the mixture is electrocuted, converting the dissolved lead compounds into lead, he says.

The AquaRefining process generates primary lead ingots, lead-acid-battery-grade lead alloy ingots, clean plastic chips that are recovered from the battery casings and sulfuric acid.

The AquaRefining process claims to be kinder to the environment than the traditional recycling method. In smelting, the lead recovered from lead-acid batteries is placed in a furnace where it is heated with coke or charcoal, isolating the lead from other compounds. The process produces lead dust and toxic slag. However, Aqua Metals affirms that its water-based modular AquaRefining process is cleaner, more cost-effective and more energy-efficient than smelting.

Additionally, Aqua Metals’ process does not require the multiple refining steps of traditional lead smelting, Cotton says. Instead, it produces an ultrapure product initially. Through an on-site assay of its initial production in McCarran, Aqua Metals says it has verified that the lead produced in the first commercial scale AquaRefining module is 99.99 percent pure.

The company says it is sending its initial production samples to several U.S. battery manufacturers—which collectively represent more than 50 percent of U.S. battery production—to conduct their own assays.

Aqua Metals says it expects its modular AquaRefining systems to allow the lead-acid battery industry to reduce negative environmental impacts while increasing production to meet growing demand for lead-acid batteries.

Distributed model

Cotton says the AquaRefining process can be very “cost-efficient,” with the possibility of “making more money than the incumbent technology.”

The company’s 135,000-square-foot AquaRefinery sits on 11.7 acres in the TRIC in McCarran. Aqua Metals says it will begin selling lead produced at this facility in the fourth quarter of 2016, though as of mid-December the company had yet to announce that it was doing so. According to Aqua Metals, it expects to reach initial capacity of 120 tons per day in early 2017, representing a 50 percent increase to the previously announced capacity of 80 tons per day of lead output. The company says it plans to expand to 160 metric tons of lead per day at the TRIC AquaRefinery in 2018.

The modular AquaRefining units don’t require as much space as traditional smelting operations. The smaller footprint and cleaner technology allow recycling facilities to be located nearer to generators or lead consumers, creating a distributed model for recycling, Cotton says. “With AquaRefining, we bring the recycling to the battery suppliers as opposed to bringing the batteries out to the recyclers.”

He adds, “We have the potential to do to the lead-acid battery industry what cloud computing did to the mainframe computer.”

He envisions AquaRefineries being located next to lead-acid battery manufacturers, allowing the manufacturers to verticalize their operations. Cotton adds that it is too risky for manufacturers to integrate recycling operations that use the smelting model because of permitting and emissions issues.

For existing lead-acid battery recycling operations, Cotton says AquaRefining is “a great opportunity for battery recyclers to convert facilities away from smelting to this process or to replace their old way of doing things.” He adds, “They can upgrade their smelting operations to include this technology and convert over time.”

Cotton adds, “Nobody loves smelting, but it was the only way you could do this. We are replacing a necessary evil.”

He says Aqua Metals has seen “a high degree of interest from the battery recycling industry.”

Getting to this point

Aqua Metals began to take shape in 2014, when a $6 million private placement through an investment banking group allowed the company to take its pilot lab-sized AquaRefining module to full size.

The company’s next stage of financing involved an IPO (initial public offering) in July 2015 that earned Aqua Metals $36 million. In November of that year, the company also received a $10 million loan guarantee from Nevada’s USDA Rural Development program.

In May 2016, Aqua Metals received a round of financing led by Interstate Batteries, headquartered in Dallas, in the amount of $10 million. Interstate Batteries is the No. 1 replacement battery brand, the largest independent battery distribution system in North America and a leading battery recycler. Additionally, Interstate Batteries has agreed to supply more than a million automotive and other lead-acid batteries as feedstock for Aqua Metals’ AquaRefineries.

With a nationwide network of more than 200,000 dealers returning battery cores, Interstate Batteries recycled more than 24.9 million automotive batteries in 2015, which is more than it sells.

At the time of the investment and partnership agreement, a news release was issued. It quotes Scott Miller, president and CEO of Interstate Batteries, as saying, “Interstate Batteries seeks out innovation, pursues opportunities and invests in the technology we need to succeed not just today but also tomorrow. Our focus is on the future of our industry and continued growth. Aqua Metals’ breakthrough technology is a promising new way for recycling lead-acid batteries.”

Interstate Batteries’ $10 million strategic investment in Aqua Metals took the form of common stock, a fixed-price note that converts into common stock and two cash warrants to purchase common stock over the next three years.

The company also has a supply agreement with Battery Systems International, headquartered in Garden Grove, California, which has a location neighboring Aqua Metals’ AquaRefinery in Nevada.

Additionally, Aqua Metals says it is in discussions with nearly every major U.S.-based battery manufacturer and recycler, as well as with data center operators and household internet brands (which use lead-acid batteries for backup power).

Aqua Metals also has signed agreements with various institutional and individual accredited investors to raise additional gross proceeds of approximately $5.1 million in a private placement of common stock as of May of this year.

Looking toward the future

Regarding future growth, he says, Aqua Metals plans to add operations in the U.S. before going abroad. However, Cotton says, “Within a reasonably short period of time, we’ll be outside of the U.S. borders, which is great because that is the holistic part of the team’s mission to build shareholder value and do something right for the planet.”

He adds, “The sooner we can get AquaRefining into the third world and shut down unsafe operators, the better.”

Currently, Aqua Metals employs 30 people at its headquarters in Alameda and 30 at its McCarran plant, though that number will grow to 70 as operations ramp up.

The company is keeping its options open regarding the possible licensing of its technology. Prior to doing so, Cotton says it’s important for Aqua Metals to own the technology and the refining facilities and to gain experience operating the technology. “If you are going to do a step function change, you need to operate the technology first before you license it,” he adds.

Also, Cotton says he is enthusiastic that AquaRefining can be used to recycle other metals, such as copper and zinc.

Regarding the company’s initial recycled lead production in McCarran, he says, “This week is a very, very big deal. If doubters are out there that we can do this on a production scale, we have proved this works. It’s a matter of scaling up.”

The author is managing editor of Recycling Today and can be contacted via email at dtoto@gie.net.