`TL:DR
In the high desert 25 miles east of Reno, Gooseberry Mine is etched into the dusty Nevada hills.
Until 1990, gold was dug out of the ground here. Now it's mostly abandoned.In late March, I stood a few hundred yards away in a makeshift chemistry lab few people have been allowed to enter.
My tour guide, Adam Kirby, a project manager at Redwood Materials, held up a small capsule containing dark powder."Black gold," he said, smiling.
The substance is known as Cathode Active Material, or CAM, a combination of metals and minerals that makes up roughly 60% of the value of EV batteries and 15% of the entire price of an electric vehicle.Oil is the original black gold, of course. This has powered automobiles for a century. Now, though, EVs are steadily replacing the internal combustion engine with what Tesla and the rest of the industry hope is a more sustainable alternative.
For this to really happen, we must recycle the big battery packs inside all these EVs. Redwood Materials, run by Tesla cofounder JB Straubel, is building North America's biggest battery recycling operation. And CAM is the company's next big bet.Straubel has been hacking away at this problem for almost a decade. Since Redwood was founded in 2017, the startup has raised about $2 billion from big investors, including Fidelity, Goldman Sachs, Baillie Gifford, and AmazonToday, Redwood recycles more than 70% of all the lithium-ion batteries in North America. If you've ever handed old laptops or smartphones to a recycling center in the US or Canada, it's likely they ended up on a giant lot in front of Redwood Materials' 300 acre desert campus.The company carefully heats these old batteries to just the right temperature to tease out the base ingredients, which include nickel, manganese, cobalt, and lithium. By themselves, these metals are valuable and Redwood has generated hundreds of millions of dollars in revenue by selling this raw material into the EV supply chain. The next step for the company is combining this into CAM, which is a lot more valuable. Hence the name: new black gold. Instead of digging it up, Redwood conjures it into being through chemistry at industrial scale."Things like Redwood are multibillion-dollar capex, ambitious projects. You must back people with experience and gravitas who can execute," said Chris Evdaimon, an investment manager at Baillie Gifford, who also visited the site recently.
"To raise equity and debt, while having the trust of governments," he added, "not many people can pull this off."
[…..]
He recounted how Redwood got started through a surprising revelation: The ingredients of lithium-ion batteries can be reused over and over. Unlike the original black gold, these materials don't go up in smoke or wear out.
[…]
Redwood's processes can now recover about 98% of the critical minerals from batteries. The problem is that once this stuff has been salvaged, it must be shipped overseas, mainly to China, where it's refined and combined into useful products such as CAM.[…]
A map of the battery materials supply chain Redwood Materials
[…]
In the coming years, Redwood aims to churn out 100 gigawatt hours worth of CAM per year. That would enable production of enough batteries to power 1.3 million EVs annually.
[…]
Reclaiming nickel, cobalt and other battery ingredients, rather than digging up virgin material from dirty, dangerous mines, is a heck of a lot more efficient. According to Redwood Materials,it uses 80% less energy,generates 70% fewer CO2 emissions, and requires 80% less water.[…]
My Thoughts 💭
This is huge bet on the future demand of EV batteries but with the current trade war and global supply chains becoming very expensive this company is facing significant headwinds but it appears this process is much better than mining it and much more eco friendly. This is a great article a if EVs do dominate then Redwood will be by far the best company to supply the world with raw EV materials.