Guanghua Technology invests in new plant for LFP recycling

Guangzhou-based Guanghua Technology has announced it will invest 454 million RMB (71MUSD) to expand its recycling capacity for lithium iron phosphate batteries. The plant will be commissioned in two years time.

Guangzhou-based Guanghua Technology, also know GH Tech, is a large specialty chemical company with products in electronics, photovoltaics and batteries. The company has invested significant amounts in both production of precursors and cathode materials as well as reuse and recycling of lithium-ion batteries. Not least was Guanghua Technology early in the second phase of the LFP growth, investing in a 50,000 tonnes precursor capacity of LFP material in 2019.

So far the end-of-life activities has been focused on reuse of EV batteries, for which the company has designed a highly automated disassembly line in their plant in Zhuhai with a capacity of 10,000 tons/year. Among several other brands the company has an agreement with BAIC of taking back the car maker's EV batteries.

The recycling capacity, in the company's battery chemical plant in Shantou has so far only been 1,000 tonnes. This plant is now expanded. Although Guanghua Technology hasn't released much details, such as capacity or specific technology, it seems like the process will recover both the LFP cathodes and anodes in their entireties, something that often is referred to as "direct recycling". Most likely the new capacity will not be less than 20,000 tonnes.

From having been a rarity there are now several new recycling plants focusing on LFP recycling in China, something that soon will be in high demand as 45% of available batteries for recycling in China in 2025 will be batteries with LFP cathode. The latest developments with increased use of LFP by car makers such as BYD, Tesla and JAC will bring confidence to the market that there will be a demand over time, something that not least make direct recycling methods more promising.

LFP recycling has both in China and in Western countries often been regarded as less profitable than recycling of cobalt- or nickel-based batteries. While that equation is totally dependent on the actual values up- and downstream there is significant less value to recover. Nevertheless Guanghua Technology estimates the project will have an operating margin of 11%.