Aqua Metals and American Battery Factory (ABF) have announced a proposed strategic collaboration aimed at strengthening the domestic supply chain for lithium-ion batteries used in electric vehicle and energy storage applications.
Under a non-binding Memorandum of Understanding (MOU), the companies plan to evaluate the co-location of a commercial Aqua Metals lithium-ion battery recycling facility adjacent to ABF’s planned lithium iron phosphate (LFP) battery cell manufacturing operations in Tucson, Arizona.
The proposed collaboration would enable Aqua Metals to recycle lithium-ion battery manufacturing scrap generated by ABF and return battery-grade lithium carbonate for reuse in US-based battery production.
The collaboration is intended to address a key challenge facing the US battery industry: the economic processing of battery materials domestically rather than exporting manufacturing scrap and black mass to overseas markets, primarily in Asia, for conventional hydrometallurgical processing. Integrating recycling with battery manufacturing could reduce logistics complexity, improve cost competitiveness, and strengthen domestic supply chain resilience.
Aqua Metals’ AquaRefining process uses an electricity-powered, closed-loop system as an alternative to high-temperature furnaces and chemical-intensive hydrometallurgical methods. The process is designed to operate within US regulatory and labor environments while producing battery-grade materials suitable for direct reuse in domestic battery manufacturing.
American Battery Factory is developing large-scale LFP battery cell manufacturing capacity in the United States, supported by federal and state initiatives aimed at expanding domestic battery production. Under the proposed collaboration, Aqua Metals would develop a co-located recycling facility to process manufacturing scrap using AquaRefining™ and supply battery-grade lithium carbonate back into ABF’s supply chain or to designated downstream partners.
The MOU also outlines plans to evaluate a commercial-scale recycling facility capable of processing up to 10,000 metric tons of lithium-ion battery materials annually, including manufacturing scrap and third-party feedstock. Co-locating recycling and manufacturing operations is expected to improve logistics efficiency, reduce transportation costs, and enhance overall operational economics.
The companies also plan to assess how domestic manufacturing incentives, including the 45X Advanced Manufacturing Production Tax Credit, could support the competitiveness of US-based battery materials production relative to foreign supply chains.
Any definitive agreements would remain subject to financing, permitting, and regulatory approvals, with a targeted start of commercial operations in 2028.
For Aqua Metals, the proposed collaboration aligns with ongoing efforts to advance domestic lithium-ion battery recycling, including pilot-scale production of battery-grade materials, bench-scale testing, and partnership development across the battery materials ecosystem. The company is working to commercialize closed-loop recycling processes for critical battery materials such as lithium, nickel, cobalt, copper, and manganese, while continuing laboratory and bench-scale evaluation of rare earth element recovery.
Filed Under: Batteries, Technology News