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Technology Minerals Shares Up 10% On Battery Recycling Plant Opening

Tim Worstall
Tim Worstall trader
Updated 31 Jan 2022

Trade Technology Minerals Shares Your Capital Is At Risk

Key points:

  • Technology Minerals has opened its first battery recycling plant
  • This is for lead acid batteries, not part of the technological plan
  • This is solving an old problem, not a new one
  • The Best UK Renewable Energy Shares to Buy

Technology Minerals (LON: TM1) shares joined the London market in November last year. The shares are up some 50% from the flotation price including today’s 10% rise.

Technology Minerals has an interesting spread of technologies and activities. The aim is to create a proper circular economy system for the new electric vehicle batteries. This is going to be difficult but as with anything difficult, the rewards to those who are able to create it will be large.

The company is taking a very wide view of what is needed in order to be fully circular. They are prospecting for the main battery metals (cobalt, manganese, lithium, etc) and also working on recycling plants for those metals from used car and vehicle batteries.

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One view of this is that it’s a very large stretch to try and do all of that off a £50 million capitalisation. On the other hand, any significant find of mineralisation can easily enough be financed.

There is also the point that no one does, currently, really know how to recycle those lithium batteries profitably. There are many claims and lots of experiments but actual proof of profit at scale is still pretty thin on the ground. The reason for this is that it's complicated metallurgy to be able to do it. It’s also very similar to the complicated metallurgy necessary to purify the virgin materials from a new mine. So there is a connection between being able to do the one well and the other. Further, any new and exciting method of recycling would possibly feed back to those mine operations and also vice versa.

The specific announcement from Technology Minerals today though is nothing to do with any of that. Instead, it’s about a lead acid battery recycling plant that their 49% owned Recyclus Group has just opened. Which might sound a little odd. Why would a company focused on the new tech of the future get involved in recycling the old tech of the past?

Which is to miss an important part of any recycling operation. Yes, it’s necessary to have the metallurgy to do it, customers for the finished items and so on. But the collection network for the material to be recycled is absolutely vital. Lead acid batteries largely come from garage networks – it’s necessary to have a collection system delivering them to the plant. Where are lithium batteries, in time, going to come from? Largely that same collection network which deals with garages.

Reprocessing lead acid batteries might not look like aiding in creating a circular economy for lithium ion ones but it is – that collection network – still a part of the overall process.

The true success of Technology Minerals will be determined by whether they do end up with a metallurgy that profitably reprocesses lithium batteries. This is something to keep an eye out for.

Tim Worstall
Tim Worstall is a freelance writer specialising in economics and the financial markets.