Aqua Metals, Yulho partner to deploy LIB recycling in South Korea

Reno, Nevada-based lithium-ion battery (LIB) recycler Aqua Metals has entered into a strategic partnership with South Korea-based storage solution and battery materials company Yulho Co. Ltd. designed to drive innovation of LIB recycling and set a new standard for a low-carbon, circular supply of the critical minerals for future electrification, the companies say.

Initiating the partnership, Yulho will make a strategic equity investment of $5 million in Aqua Metals, which the company says underscores its confidence in Aqua Metals’ technology and demonstrated results at its pilot-scale facility. The companies have entered into a securities purchase agreement and say they expect to close on the investment on or about Aug. 4 of this year.

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In addition to the capital investment, the companies say they have entered into an agreement to negotiate and execute a definitive license agreement where Aqua Metals will grant Yulho a license to deploy Aqua Metals’ patented AquaRefining technology in South Korea in its own facilities.

“We believe our recently announced public equity raise, alongside our strategic financing and proposed partnership with Yulho, signifies a transformative moment for Aqua Metals,” Aqua Metals President and CEO Steve Cotton says. “We expect this to be a pivotal step in our long-term vision for global growth, accelerating our commercial operations here in the United States, and bringing our AquaRefining technology to South Korea, a region of technological leadership and one of the largest markets for critical minerals, to address the increasing demand for sustainable battery materials in Asia.”

The companies say the partnership is intended to capitalize on their respective strengths. Yulho has 25 years of experience in South Korea’s advanced technology sector, where it says it possesses the expertise and established relationships with the country’s largest LIB and electric vehicle (EV) companies to rapidly scale operations to meet the growing demand for recycled materials in Asia. Through its subsidiary, Yulho Materials, the company collects and processes battery manufacturing scrap and spend LIBs into black mass that Aqua Metals recovers.

Yulho Materials previously completed the pilot demonstration of its own proprietary black mass process and has provided material samples to Aqua Metals, according to the company. Yulho currently is building a high-purity black mass facility with an annual capacity of 8,000 metric tons, and says it expects to begin production later this year, with plans to expand to 24,000 tons of capacity in the future.

Aqua Metals uses its AquaRefining technology to recover the metals and minerals contained in LIB black mass without the use of furnaces or intensive chemical processes that produce excessive carbon emissions and chemical waste.

“Since April, both companies have been engaged in confidential negotiations after signing a nondisclosure agreement,” Yulho CEO Jeong-Nam Lee says. “Given that each company excels in preprocessing and postprocessing fields, we anticipate significant synergy resulting from this partnership.

“We aim to expand our business model beyond a simple technology swap and joint venture establishment,” Lee adds. “Together, both companies will pursue collaborative ventures, elevating our business model.”

For the equity investment, Yulho says it has agreed to purchase approximately 4.5 million shares of common stock at a purchase price of $1.10 per share in a registered direct offering, totaling $5 million gross proceeds. The initial licensing agreement with Aqua Metals is expected to allow for up to 100,000 tons of materials processed per year in South Korea, and both companies say they anticipate the relationship expanding beyond Asia to the European Union as well. The deal was arranged by Network 1 Financial Securities and Nexpedia Holdings Co. Ltd.

Additionally, Aqua Metals has announced the pricing of a firm commitment underwritten offering of more than 15 million shares of common stock at an offering price of $1.10 per share, bringing the total combined gross proceeds of the two offerings to approximately $22 million. Aqua Metals says the two capital raises are expected to fortify its balance sheet, enabling it to fund and pursue debt solutions for the first phase of development of its 10,000-tons-per-year commercial-scale recycling facility in Reno and achieve a positive cash flow.