RecycLiCo JV in Taiwan comes to an end

Canadian battery recycling company RecycLiCo Battery Materials Inc. and its joint venture (JV) partner Zenith Chemical Corp. have jointly determined to abandon construction of a battery recycling facility in Taiwan and have entered into a definitive mutual release and termination agreement to unwind their previously established JV company.

The lithium-ion battery shredding and recycling plant in Taiwan, designed to produce marketable black mass, was hailed last summer by RecycLiCo interim CEO Richard Sadowsky as the first step in the company's transition from a venture-stage company into a revenue-generating "global industrial enterprise."

When the JV was announced in June 2023, the firms indicated they intended to build a 2,000-metric-ton-per-year lithium-ion battery recycling plant with an estimated price tag of $25 million.

Last summer, RecycLiCo announced it had engaged fellow Canadian company Hatch Ltd. to provide consulting services to review the design plan for the plant, which had been prepared by Kemetco, the JV’s principal contractor and RecycLiCo’s longtime collaborator.

This January, however, Sadowsky authored a letter after RecycLiCo’s annual general meeting that referred to 2024 as "a challenging year," and said 2025 is not a year in which the company intended to commence speculative, capital-intensive projects.

Under the terms of the JV termination agreement just announced, RecycLiCo will sell to Zenith its entire interest in 3 million common shares of the JV company, RecycLiCo Zenith Battery Materials Technology Co., for gross proceeds of about $580,000.

“As additional consideration, Zenith will return to RecycLiCo 4 million RecycLiCo common shares and 6 million share purchase warrants previously issued under the agreement,” RecycLiCo says, adding that it retains ownership of its technology.

The April agreement provides for the full and final settlement of all rights and obligations between the parties relating to the JV, according to RecycLiCo, and Zenith will assume full ownership of the JV while discontinuing use of the RecycLiCo name.

“This decision reflects a mutual recognition by both Zenith and the company of the evolving world economic and geopolitical environment,” Sadowsky says. “Market conditions are not what they were in 2022 when the original joint venture feasibility study was conducted. There have been changes in battery material supply streams and increased capitalization costs relative to the initial projections, which were prepared during a period of elevated lithium prices. We thank our partners at Zenith for their support and collaboration.

“The company remains firmly committed to its global commercialization strategy and focus on flexible, capital-efficient growth. By eliminating the capital commitments associated with the joint venture, we have significantly strengthened our cash position and extended our financial runway to nearly a decade at current spending levels. We can now direct more resources toward enhancing our scientific and technical capacity and exploiting opportunities in our core growth markets, including potential strategic investments in companies with complementary technology.”