Growing demand for battery raw materials is driving increased investment in recycling infrastructure, with recyclers, commodity traders and mining groups positioning black mass as a commercial source of critical minerals rather than a waste stream.
A significant development in the sector came with Nth Cycle’s US$1.1 billion, 10-year offtake agreement with Trafigura, covering the supply of nickel and lithium carbonate recovered from battery-derived black mass. The agreement includes purchases of 2,000 tonnes of contained nickel in mixed hydroxide precipitate and 1,500 tonnes of lithium carbonate refined from 12,000 tonnes of black mass.
Black mass, generated from shredded end-of-life lithium-ion batteries and battery manufacturing scrap, can contain lithium, nickel, cobalt, manganese, copper and graphite, depending on battery chemistry. Increasingly, it is being treated as a feedstock source within critical minerals supply chains.
Long-Term Offtake Supports Commercial Recycling Models
The agreement highlights the growing role of commodity traders in the battery recycling sector. Long-term purchasing commitments provide a route to market for refined products and support efforts to secure feedstock and expand processing capacity.
Nth Cycle has been developing its position as a critical minerals refining company. According to Reuters, the company began refining operations in Fairfield, Ohio, in 2024 and plans further expansion into South Carolina and the Netherlands by 2028 through its modular Oyster refining system. The planned Dutch facility has received support through a €7.5 million grant awarded under the CRM Lion initiative. The Trafigura agreement establishes a commercial outlet for products generated from recycled battery materials and reflects increasing demand for qualified recycled metals within global supply chains.
Major Commodity Groups Increase Exposure to Battery Recycling
The sector has also attracted investment from established mining and trading companies. On August 8, 2025, Glencore completed the acquisition of Li-Cycle, with future operations continuing under Glencore Battery Recycling.
The transaction expanded Glencore’s presence in battery recycling and added processing infrastructure to its existing portfolio of metal marketing, refining, smelting and recycling activities. The move reflects broader industry efforts to secure access to secondary sources of critical minerals as demand for battery metals continues to grow.
Investment Continues Across Recycling and Refining Platforms
Other companies are also expanding recycling capacity and downstream processing capabilities. According to Reuters, Redwood Materials secured US$350 million in financing through a funding round led by Eclipse Ventures, with participation from NVentures, the investment arm of Nvidia. Redwood recovers lithium, cobalt, nickel and copper and has also expanded into energy storage systems serving grid and data-centre applications.
In Europe, Umicore reported that its Battery Recycling Solutions business remained on track according to its 2026 operational update, maintaining its position in industrial-scale recycling and refining.
Feedstock Access and Financing Remain Key Challenges
The sector continues to face operational and financial hurdles despite growing commercial interest.
Ascend Elements signed a multi-year recycled lithium carbonate offtake agreement with Trafigura in 2025 covering 15,000 tonnes scheduled for delivery between 2027 and 2031. Feedstock quality remains a critical factor for recyclers. Material composition can vary significantly depending on battery chemistry, supplier, age and processing methods. Operators must also manage impurities, recovery efficiencies, reagent consumption, environmental permitting requirements and product-quality specifications.
Competition for battery scrap and end-of-life batteries is also increasing as automakers, battery manufacturers, commodity traders, miners and recyclers seek access to the same material streams.
Policy Support Strengthens Recycling Demand
Regulatory initiatives are adding momentum to the sector. Under the European Union Critical Raw Materials Act, the bloc aims to source 25% of annual strategic raw material consumption from recycling by 2030.
The target supports development of domestic recycling capacity and positions black mass as an increasingly important source of battery materials alongside primary mining operations.
Companies including Nth Cycle, Trafigura, Glencore, Redwood Materials, Umicore and Ascend Elements are expanding activities across feedstock sourcing, refining technology, product qualification and long-term marketing arrangements as recycled battery materials become an increasingly significant component of critical minerals supply chains.
