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The Hidden champion of Lithium-ion battery cathode recycling: American Manganese Inc. (AMY)

Updated: Jul 2

Company: American Manganese Inc.


Market Cap: CAD 274MM

As the best battery materials are the ones you don’t have to mine, today's blog post covers an hidden champion in the circular economy, achieving astounding recovery rates of up to with 100%. Their unique point of view, which approached recycling from an outsiders perspective, led the team to re-imagine recycling in their own way.


  • Why recycling?

  • Who is AMY & the origins

  • Origins lead to manganese project

  • RecycLiCo™

  • Copper & niobium projects as optionality

  • Conclusion

Why recycling?

The amount of new battery gigafactories being announced every week is staggering.

Benchmark Minerals Intelligence is tracking 181 Battery Manufacturing Megafactories with over 3,000 GWh of capacity expected in the coming decade. Moreover, there are proposed phase outs of internal combustion vehicles in multiple countries and cities ongoing. Meanwhile the limiting factor for this massive transition from ICE vehicles to EV will require a huge amount of raw materials that are in short supply. In addition, the mining industry has been suffering of serious under-investment for the last decade. Thus, ramping raw material supply will be a challenging endeavor. However, it is possible to recycle the raw materials needed for lithium-ion batteries and recycling could become a critical piece of the puzzle to secure supply chains and ensure the transition to EV is successful.

Who is American Manganese Inc?

American Manganese (AMY) is a very unique company. When I first discovered them through a youtube interview last year, I was intrigued by their recycling process and only later found out that they even do more. At first glance it is quite understandable why they are under the radar still and a hidden champion in their field of expertise. Once I digged deeper, their high potential became very obvious to me.

In their own words AMY "is a critical metal company focused on the recycling of lithium-ion batteries using their RecycLiCo™ Patented Process. The process offers a closed-loop and environmentally friendly hydrometallurgical solution for the recycling of cathode materials from spent lithium-ion batteries and battery manufacturing scrap." (americanmanganeseinc.com)

Current CEO Larry W. Reaugh founded the company in 1998. Larry is a serial entrepreneur with 55+ years’ experience in the mining industry. Several of his companies have made significant discoveries, three of which (gold/silver) went on to be producing mines.

The story of AMY as it exists today started with the purchase of properties in Mohave County, Arizona in 2007, which encompass historical open-pit and underground mines that produced manganese from 1928 to 1955 for delivery to various steel mills and U.S. government strategic materials stockpiles. Manganese is the most critical metal and in high demand because of its applications in steel, battery and electric vehicle production. “There is no substitute for manganese in the production of steel and as BHP Billiton’s former CEO Brian Gilbertson has said, “You cannot make steel without manganese. And if you cannot make steel – the world stops”. By 2008 AMY had completed all necessary feasibility studies (cots of millions of dollars) at artillery peak. Unfortunately strategic actions by China lead to manganese prices falling to a level that made the project uneconomical. This would have meant the end for AMY, but they were able to pivot.

During their work at artillery peak, they realized that the recovery, treatment & separation of cobalt, lithium, nickel and others is similar to that of manganese. This lead to the idea of investigating their thesis further and pivoting into cathode material recycling of the scraps that are part of the process in gigafactories.

The idea was to patent their processes and licence them to gigafactories. Having a background in mining and not in traditional recycling lead to the AMY team having a very unique point of view on recycling. AMY's process can recover nearly all of the cathode materials meaning 100% cathode will again become 100% cathode material. Thus it becomes a closed loop process rather than sending the collected scrap to hubs first. More on that later.

Currently 90% of the world's manganese supply comes from four countries, but a US government's directive in 2020 may lead to discovery and development of significant deposits in North America and strengthen US & Canadian based manganese players. In addition, the prices for manganese are rising again. This plays right into AMY's cards as in addition to their main focus (the recycling process RecycLiCo™), they are also working on the Wenden manganese stockpile project. Their other projects are focused on copper/gold and niobium. I will briefly cover those at the end.

Wenden Stockpile

During the 1950s-through 1960s the U.S. government purchased a stockpile of raw manganese in Wenden, Arizona. Wenden has one of the nation’s most significant low-grade raw manganese ore stockpiles (approximately 322,000 metric tons). However, the U.S. government was unable to leverage the manganese due to its low-grade, as well as requirements for a specialized processing method to efficiently transform the raw manganese into useful forms of advanced manganese material. The growing awareness of the fact that manganese is a critical mineral necessary for national defense while there is no U.S. manganese production lead to the United States Defense Logistics Agency (DLA) awarding AMY a grant to perform work on the Wenden stockpile. AMY (to my knowledge) is the only North American based company that can process the low grade material with favorable outcome. The goal was to produce electrolytic manganese metal (EMM) for the USA and transform sub-economic manganese resources into a valuable source of EMM. The DLA manages combat logistics across all U.S. Armed Services and oversees the U.S. National Defense Stockpile (NDS).

On February 4th 2021 AMY announced positive manganese extraction results of up to 99% extraction of manganese. A result that underscores AMY's expertise and gives a first preview on why their RecycLiCo™ patented process is currently (potentially) under evaluation at all the gigafactories and top tier battery producers.

RecycLiCo™ - Lithium-ion battery cathode material recycling

2016 marks the year in which AMY officially started to pivot from raw materials mining into battery materials recycling. The team developed the RecycLiCo™ patented process which aims to produce materials as high-quality cathode precursor, that could be directly integrated into the re-manufacturing of battery cathodes using minimal processing steps.

Applying this process AMY achieves high recovery and purity of materials such as lithium, cobalt, nickel, manganese, and aluminum from cathode chemistries such as NCA (lithium nickel cobalt aluminum oxide), NMC (lithium nickel manganese cobalt oxide), LCO (lithium cobalt oxide), and LMO (lithium manganese oxide).

(Source: American Manganese Inc)

As can be seen in the graphic above, 25% of the cost of a lithium-ion battery stem from the cathode material. Therein lies a challenge but also an opportunity as part of the EV (electric vehicle) revolution when asking the question "what happens to the battery at end of life?"

As raw materials make up the majority of costs during the lithium-ion cell production, it makes sense to think of ways how to efficiently recycle the materials instead of digging new raw materials out of the ground.

(Source: American Manganese Inc)

The steps in the lithium-ion battery material supply chain (see above) consist of mining & refining, precursor & CAM, other mat. supply and cell manufacturing. All of these steps are not completed in the same country currently. AMY's process offers the benefit that the complete supply chain could be located from start to finish in one country and thus compress supply chain processes and costs.

(Source: American Manganese Inc)

Current battery cell production processes are far from perfect and result in scrap at an average scrap rate of 10% which is the same size as the entire 2016 Li-ion battery market. The scrap material is the feedstock that is available today and this material is considered low hanging fruit in the recycling industry. However, the current recycling options are limited (see below) and lead to harmful emissions.

(Source: American Manganese Inc)

RecycLiCo™ is more efficient than current options, because it is purposely designed with the goal to recycle cathode scrap directly as part of the integrated cell production process.

(Source: American Manganese Inc)

AMY's pilot plant (see above) was commissioned in 2019 and will soon be upgraded to a demonstration plant (including flowsheet). With their process AMY has proven that they can directly produce mixed precursor material. To spell this out, as it is an important point: Through the RecycLiCo™ process an old cathode will become a new cathode - like for like - at 100% recovery.

The process has been successfully tested on multiple cathode materials with up to 100% extraction. The idea centers around the business case to produce highest value, with few steps and producing the best product.

(Source: American Manganese Inc)

The RecycLiCo™ commercial model is centered around the (on average) 10% production scrap rate and the huge losses that are incurred due to the scrap rate. As pictured above, a 10 GWh battery manufacturer incurs $27.1 MM worth of cathode active material losses.

The losses are huge and RecycLiCo™ could recoup this and be the piece of the puzzle for battery factories to vertically integrate and reduce Li-ion battery costs.

The industry is realizing the immense value AMY can offer and the first MoU was announced recently. AMY signed a MoU with Italvolt Italy’s first battery Gigafactory and one of the largest in Europe, to develop a commercial recycling plant alongside Italvolt’s planned Gigafactory in Scarmagno, Italy. American Manganese and Italvolt will work collaboratively to recycle waste lithium-ion battery cathode material using the patented RecycLiCo™ process.

(Source: American Manganese Inc)

Having made the decision to pivot the company and having to deal with high development costs requirements, made having their process patented a high priority for AMY. The Company holds patents in Canada, US, China and South Africa for production of electrolytic manganese metals from low-grade manganese deposits. RecycLiCo™ is patented globally, including countries like USA, China, Japan, Europe, Australia, India and Canada. The most recent patent has been awarded in Korea.

(Source: American Manganese Inc)

In terms of the competition, AMY is quite differentiated. Their foresight for the battery recycling market led to early R&D work starting in 2016. This includes bench scale testing, a pilot plant scale-up project, process optimization tests, third-party material testing, patents, and a publication in a peer-reviewed journal. Moreover, RecycLiCo™ is a circular process which is very different from the hub and spoke model traditional recycling companies use. Companies that use an hub and spoke model receive deliveries of complete battery packs or sometimes black mass. They then first have to scrap it and only get the materials afterwards. Companies like Li-Cycle claim to have a 95% recovery rate, but this rate is measured based on the battery pack level. In contrast, AMY has achieved recovery rates of up to 100% and this is based directly on the scrap or cathode, which in turn can be directly converted back to a cathode as part of the process. As part of the hub and spoke model the recycling company is dependent on getting the battery packs delivered, while AMY is directly integrated into the process at the factory. Finally, AMY is not only recycling but also producing NMC (lithium-nickel-manganese-cobalt oxide) cathode precursor material directly from recycled NMC cathode waste, using the RecycLiCo™ patented process.

Mineral properties - Copper, Gold, niobium

Further differentiation from traditional recycling companies can be attested to AMY's roots in mineral mining & exploration. Recently AMY published an update regarding the

Rocher Deboule Mine (where ore grades averaged 5.9% copper and 2.9 g/t gold) reporting that the team is preparing for a drill program at the copper-gold property. Rising copper prices and its favorable supply demand dynamics could lead to a drastic

reevaluation of AMY's market cap, should the drilling lead to positive results. My suspection is that AMY's resumption of mining activities has not been realized by the wider market yet. Driven by population growth, elevation of life quality standards in developing countries and the secular trend of electrification leads Roskill to forecast total copper consumption exceeding 43MM tonnes by 2035. However, the world mine production was only 20Mt last year (Mills 2021).

The Lonnie & Virgil project recently caught my attention as it is a niobium exploration property which claims feature rare earth element (REE) and niobium bearing mineralization hosted in carbonatite intrusive sills.

Niobium is classified as critical raw material and is defined as "a soft, grey, ductile transition metal with atomic number 41. Annual Niobium supply is currently in the region of 64,000T/y. Niobium’s main application is as a strengthening agent in high-grade structural steels. It readily forms Niobium Carbide and Niobium Nitride precipitates which improve grain refining and slow down recrystallization during heat treatment. The content required is very small (less than 0.1%), but the strength imparted to the steel allows construction components to be built smaller and lighter. Niobium is also a key ingredient in a range of superalloys such as Inconel,"

Niobium could potentially be an important component in EV production. With the battery raw materials being the limiting factor in scaling up EV production, making the EVs lighter would in turn make it possible to use smaller battery packs.

90% of the niobium supply is produced by the private, Brazilian company CBMM

and 9% by the Niobec mine in Canada, owned by Magris Resources. This extreme monopolization explains the supply risk depicted in the graph below. Niobium can be found on the upper right side, which means it has high economic importance and bears high supply risk. Any niobium mining that AMY is able to achieve, should also be very favorable for their market cap.

(Source: 2020 Study on the review of the EU’s list of Critical Raw Materials (2020))


Attentive readers might have noticed that I did not cover any financial metrics in this article. As AMY is a pre-revenue company and their licencing model has not been communicated yet, I am approaching this as a venture type of investment. In conclusion, AMY is a company that offers potential investors exposure to a compelling value proposition:

  • Manganese production in the USA - one of the most critical minerals

  • Closed loop recycling of Li-ion battery materials with 100% recovery rate

  • A process that is integrated into the gigafactory production process -> easily scalable

  • Optionality on copper, gold & niobium

  • Small market cap (<300MM CAD), leaving lots of room to grow

What are catalysts to look out for this year?

  • Updates regarding cathode reactor testing project

  • Wenden Stockpile project updates

  • Pilot plant upgrade and commercial plant design (commercial plant in 6-12 months stated by Larry April 24th 2021 on the weekly podcast)

  • New MoU announcements with major gigafactories

  • Updates from the copper, gold and niobium projects

AMY is part of my Picks and shovels plays wikifolio and has become one of the key positions I overweighted.

I am contemplating interviewing AMY's CTO Zarko and post the interview on www.shovel-stocks.com. Stay tuned


Disclaimer: This blog post is purely my personal opinion and is not financial advice. Please do your own research, before taking investment decisions. I am long American Manganese Inc.