RecycLiCo eyes research rather than new projects

The CEO of Canada-based RecycLiCo Battery Materials Inc. has written a letter following the company’s annual general meeting (AGM) referring to 2024 as a challenging year and saying that 2025 is not year in which it intends to “commence speculative, capital intensive projects.”

The letter from RecycLiCo Interim CEO Richard Sadowsky characterizes the AGM as one where the challenges of 2024 were discussed “at length.” Writes Sadowsky in his post-AGM letter, “We face multiple headwinds including slowing electric vehicle (EV) consumer demand, low commodity prices and the effects of political (and geopolitical) developments on the prospects for mandatory recycling regulations.”

The interim CEO says the company now has “an essentially new board and management team [that has] spent a good deal of time understanding a changed and changing world and made significant course corrections to preserve the company’s financial position and industrial relevance.”

Sadowsky seems to indicate RecycLiCo may consider shifting some of its attention to processing mined battery or “critical” minerals. “We begin the year anticipating new and exciting opportunities in critical mineral sourcing and recovery and are taking the steps that will allow the company to take advantage of those prospects,” he writes.

“We believe that our technology and relationships will enable us to explore critical mineral recovery activities that are not limited to just battery recycling,” he writes in another portion of the letter.

On the recycling front, he refers to a joint venture (JV) project in Taiwan as one that may become less of a priority for the firm. “We are in discussions with our joint venture partner in Taiwan regarding possible changes to that project and the nature of our participation,” writes Sadowsky, referring to Taiwan-based JV partner Zenith Chemical Corp.

Sadowsky says another partnership that may undergo changes in 2025 is the one it has with Canada-based Kemetco Research Inc. He refers to that firm as RecycLiCo’s “principal service provider and technology vendor,” but tells shareholders the board has identified RecycLiCo’s lack of in-house technology or capacity as a “persistent risk.”

“This risk has been identified by some potential customers and by virtually every potential strategic or financial investor that has had discussions with the company,” writes the executive. “Kemetco is aware of our situation and of our need to qualify for government funding. The team at Kemetco is talented and supportive and we have assured them that we expect to continue to make regular use of their services.”

Adds Sadowsky, “We also believe that military and national security concerns will create opportunities for us to partner with governmental entities and take advantage of grant and cooperative funding opportunities. To qualify for these highly valuable and sought-after programs, the company must demonstrate that it has the relevant in-house scientific and technical expertise, and we are actively engaged in building out our team.”

The interim CEO, who in the letter points to the delay or financial woes of battery recycling companies such as Northvolt in Sweden and the E-One Moli project in Western Canada, writes the AGM may have “left some shareholders with the impression that the board has a bleak view of the recycling sector and the company’s prospects. That impression is incorrect.”

Writing that he sees the role of the board and executives as to create shareholder value, Sadowsky adds, “We have seen too many examples of high-flying, big-spending and supposedly well-capitalized companies and projects crash and burn over the past year.”

Pointing to the company’s $15.5 million in cash reserves and low spending rate, Sadowsky tells shareholders, “We are, in fact, optimistic about the future, but getting there requires clear-eyed assessments of the roadblocks and potential pitfalls. In our view, there will ultimately be increasing demand for the recovery of the critical mineral components of batteries and regulatory frameworks in multiple countries that will require the kind of battery upcycling that our technology can deliver.”