We are fans.*
From Business Insider, April 10:
In the Nevada desert, a Tesla cofounder digs deep for the new black gold
In the high desert 25 miles east of Reno, Gooseberry Mine is etched into the dusty Nevada hills. Until 1990, gold was dug out of the ground here. Now it's mostly abandoned.
In late March, I stood a few hundred yards away in a makeshift chemistry lab few people have been allowed to enter. My tour guide, Adam Kirby, a project manager at Redwood Materials, held up a small capsule containing dark powder.
"Black gold," he said, smiling.
The substance is known as Cathode Active Material, or CAM, a combination of metals and minerals that makes up roughly 60% of the value of EV batteries and 15% of the entire price of an electric vehicle.
Oil is the original black gold, of course. This has powered automobiles for a century. Now, though, EVs are steadily replacing the internal combustion engine with what Tesla and the rest of the industry hope is a more sustainable alternative.
For this to really happen, we must recycle the big battery packs inside all these EVs. Redwood Materials, run by Tesla cofounder JB Straubel, is building North America's biggest battery recycling operation. And CAM is the company's next big bet.
Straubel has been hacking away at this problem for almost a decade. Since Redwood was founded in 2017, the startup has raised about $2 billion from big investors, including Fidelity, Goldman Sachs, Baillie Gifford, and Amazon.
Today, Redwood recycles more than 70% of all the lithium-ion batteries in North America. If you've ever handed old laptops or smartphones to a recycling center in the US or Canada, it's likely they ended up on a giant lot in front of Redwood Materials' 300 acre desert campus.
The company carefully heats these old batteries to just the right temperature to tease out the base ingredients, which include nickel, manganese, cobalt, and lithium. By themselves, these metals are valuable and Redwood has generated hundreds of millions of dollars in revenue by selling this raw material into the EV supply chain.
The next step for the company is combining this into CAM, which is a lot more valuable. Hence the name: new black gold. Instead of digging it up, Redwood conjures it into being through chemistry at industrial scale.
It's an expensive and technically complex bet for Redwood, Straubel, and his investors. While driving down from the lab with Kirby, the project manager, we passed a building under construction that was so huge it made the nearby earth-moving trucks look like toys. This will house most of the full-scale CAM production process, featuring a heated conveyor belt more than 150 feet long.
"Things like Redwood are multibillion-dollar capex, ambitious projects. You must back people with experience and gravitas who can execute," said Chris Evdaimon, an investment manager at Baillie Gifford, who also visited the site recently.
"To raise equity and debt, while having the trust of governments," he added, "not many people can pull this off."
"Infinitely recyclable"
When I got back down the hill, I was ushered into the main Redwood office building on campus and met Chief Commercial Officer Cal Lankton in the "Nickel" office (next to the "Manganese" and "Lithium" rooms, of course).He recounted how Redwood got started through a surprising revelation: The ingredients of lithium-ion batteries can be reused over and over. Unlike the original black gold, these materials don't go up in smoke or wear out.
"That was the foresight on JB's part," Lankton said. "That's what differentiates this automotive transformation from previous ones — the batteries themselves are infinitely recyclable."
Redwood's processes can now recover about 98% of the critical minerals from batteries. The problem is that once this stuff has been salvaged, it must be shipped overseas, mainly to China, where it's refined and combined into useful products such as CAM.
By the time this material goes into a new battery cell in a US gigafactory, it has traveled roughly 50,000 miles from being shipped to Asia and then back again, according to Baillie Gifford's Evdaimon.
That's massively inefficient. If the US and Europe really want to meet lofty goals such as having half of cars being electric by 2030, a homegrown industry is needed. "Redwood Materials is essential for this," Evdaimon added....
It's Redwood that we are interested in. The other three, Climeworks, Solugen and Sila Nanotechnologies may or may not make it but Redwood seems to be a possible fortune builder....
If interested see also:
"Most electric-car batteries could soon be made by recycling old ones"
"A Porsche-backed startup is building a massive battery recycling plant to boost Europe’s EV industry"
There was a time when I thought Veolia, Umicore and maybe Johnson Matthey would be European champions of battery recycling but for whatever reason they never went big.Battery Recycler Redwood Materials Plans To Enter Manufacturing Business
Redwood Materials is a company I would like to own. Preferably in its entirety but if that is not possible a share of the business would be acceptable. Some links below....
- "EV Battery Recyclers Redwood Materials Raised Over $1 Billion"
- Battery Recycler Redwood Materials Will Have 5 Million Square Feet Under Roof At Its Nevada Campus
- Tech/Manufacturing/Business: "J.B. Straubel talks Tesla, Redwood Materials and keeping a startup mentality at any scale"
As we noted in a 2021 Redwood Materials post, "Watch Out Umicore: Ford partners with battery recycling and materials startup Redwood Materials":
Straubel was more than just Chief Technical Officer at Tesla. He was part of the company's founding team and more than anyone got the batteries and gigafactory into mass production.Which may explain the Go Big or Go Home approach to industrial facilities.
