Nth Cycle signs $1 billion mineral offtake agreement with Glencore before public listing

Nth Cycle, a US metals refinery startup, has signed an offtake agreement worth $1 billion with Glencore. The deal is to supply the commodities giant with minerals such as lithium and other essential minerals extracted from used batteries.

The US battery recycling industry is awash with deals for 10 years, as governments and companies race to secure domestic resources of minerals essential for electric vehicle batteries.

The agreement was signed at Glencore offices in New York on Tuesday, the first time it has been reported. This is at a moment when critical minerals will be a focus of this week's United Nations General Assembly.

The technology of Massachusetts-based Nth Cycle uses an electrochemical method to extract minerals from electronic waste or other materials such as shredded batteries, mined rock or?mining waste.

Glencore has agreed to sell Nth Cycle approximately 24,000 metric tonnes per year of black mass, which is shredded battery components. This will be used as feedstock for the company to extract minerals.

Nth Cycle will process the black mass, and then supply Glencore for a period of 10 years with mixed hydroxide material and lithium carbonate. The volume of the black mass will vary depending on the mineral content.

Companies said that the?deal value reflects metal prices as of the second half of this year.

Nth Cycle plans to build a commercial plant somewhere in the US Southeast, where it will process minerals for Glencore and commodities trader Trafigura, under terms of an agreement announced in March.

Location of the commercial facility will be announced in late 2018 and operations are expected to begin by 2029. This is a change from earlier in the year, when Nth Cycle had planned to open its facility by 2028 and build it in South Carolina.

The company has now doubled its planned facility size due to the Energy Department grant, and is looking for a bigger site.

Megan O'Connor is the CEO of Nth Cycle. She said, "This partnership represents a strategic alliance between our two companies, which will accelerate the overall market for critical minerals in the US."

Glencore, a major marketer of black masses and a company that last year purchased the assets of the bankrupt battery recycler Li-Cycle said they aimed to "close the loop" in the supply chain of essential minerals for their?US clients.

By the end of the year, PUBLIC LISTING IS EXPECTED

Glencore's agreement follows Nth Cycle's announcement in July that it would be going public via a merger with a special purpose acquisition company, Kensington Capital Acquisition. The deal valued the company at $585 million.

Nth Cycle canceled a Series C?funding scedule earlier this year. O'Connor explained that the move was a result of a desire to receive more funding through the public listing.

O'Connor said, "We decided going public was the right thing to do." I'd be surprised to meet a company who wasn't considering multiple fundraising options simultaneously.

(source: Reuters)