SK Ecoplant, Ascend Elements in $66 mn US battery recycling JV deal

SK Ecoplant Co., a South Korean construction engineering and waste management firm, and its two overseas affiliates are launching a $65.8 million battery recycling joint venture in the US as SK works to transform into an eco-friendly energy company.

The energy and engineering unit of Korea’s No. 2 conglomerate SK Group said it has signed a joint venture agreement (JVA) with Ascend Element Inc., a US lithium-ion battery recycling firm, and Singapore-based electronic waste recycling company TES Envirocorp Pte.

A JVA signing ceremony was held in Seoul, attended by SK Ecoplant Chief Executive Park Kyung-il and Ascend Elements CEO Michael O’Kronley. TES Chairman Terence Ng joined remotely via video conferencing.

Under the agreement, the three companies will build a pre-treatment facility on a 9,290 square-meter plot of land in Hopkinsville, Kentucky.

Construction of the facility will begin in November with full operations slated to kick off in January 2025, SK said.

Once completed, the plant will produce 12,000 tons of black mass a year – black powder that contains nickel, lithium, cobalt and manganese extracted from spent lithium-ion batteries.

Pre-treatment refers to disassembling and shredding scrap, a byproduct generated from electric vehicle battery manufacturing, and extracting black mass.

The joint venture, the first Korean-US waste battery recycling company in North America, will be 64% owned by SK Ecoplant, 25% by Ascend Elements and the remaining 11% by TES.

BATTERY BELT

The battery recycling joint venture is strategically located in Kentucky, which is fast emerging as the “battery belt” of the US where a growing number of global battery makers are building their plants, making it easier for SK to gather scrap from discarded batteries.

Established in Massachusetts in 2015, Ascend Elements is a recycling specialist that uses advanced particle engineering techniques to transform used lithium-ion batteries and scrap into highly engineered precursors and cathode active materials.

Backed by a $480 million US government grant, the US company is in the middle of constructing North America’s first cathode precursor factory, capable of supplying the material to 750,000 electric cars annually.

SK Ecoplant has invested $60.84 million in Ascend Elements – $50 million in August last year and $10.84 million this April – to become its largest shareholder with a seat on its board of directors.

Recently, Singapore’s Temasek, Decarbonization Partners – a JV between BlackRock and Temasek, and the Qatar Investment Authority led a $460 million Series D investment in Ascend Elements, raising the US battery recycling firm’s corporate value to around 2 trillion won ($1.5 billion).

GLOBAL BATTERY RECYCLING VALUE CHAIN

SK Ecoplant, formerly SK Engineering & Construction Co., is striving to transform into an eco-friendly energy company from a construction enterprise.

SK Ecoplant CEO Park said earlier this year the company is betting on the waste battery business, which extracts raw materials that can be recycled by disassembling end-of-life electric vehicle batteries, as its future growth engine.

With 46 facilities across 23 countries, the company has established a global network for battery recycling – a move also designed to comply with the US Inflation Reduction Act (IRA) and the European Critical Raw Materials Act (CRMA).

As part of its efforts to strengthen its recycling business, SK acquired Singapore-based TES Envirocorp for $1 billion last year.

TES operates 43 plants in 21 countries, with major facilities in Singapore, China, Australia, the UK and Germany.

“Once the latest US joint venture and the pre-treatment facility are up and running, we will have achieved a competitive edge in the global waste battery recycling sector,” said CEO Park.

Write to In-Hyeok Lee at twopeople@hankyung.com

In-Soo Nam edited this article.