The battery recycling industry is entering a new phase. What was once viewed primarily as an environmental solution is rapidly becoming a critical source of strategic raw materials for the global energy transition.
The clearest sign of this shift is not policy support or technology innovation—it is long-term offtake agreements. When major commodity traders commit billions of dollars to purchasing recycled battery materials, it signals that recycled metals are becoming an integral part of global supply chains.
A prime example is the recently announced 10-year, US$1.1 billion agreement between Nth Cycle and Trafigura, under which Trafigura will purchase significant volumes of nickel and lithium carbonate recovered from battery-derived black mass. The deal covers 2,000 tonnes of contained nickel in mixed hydroxide precipitate and 1,500 tonnes of lithium carbonate, refined from approximately 12,000 tonnes of black mass. This agreement marks a turning point for the battery recycling sector, demonstrating that recycled materials are no longer viewed as waste streams but as commercially valuable commodities.
Black Mass Is Emerging as a Critical Source of Battery Metals
At the center of the recycling revolution is black mass, the shredded material generated from end-of-life lithium-ion batteries and manufacturing scrap.
Depending on battery chemistry, black mass can contain valuable metals and minerals, including:
- Lithium
- Nickel
- Copper
- Cobalt
- Manganese
- Graphite
For years, black mass was primarily discussed within the context of waste management and environmental sustainability. Today, it is increasingly recognized as a strategic feedstock capable of supplying critical battery materials without requiring new mine production. As electric vehicle adoption accelerates and battery manufacturing expands worldwide, access to black mass is becoming a competitive advantage.
Nth Cycle Positions Itself as a Critical Metals Refiner
While many companies market themselves as recyclers, Nth Cycle is pursuing a different strategy. The company is positioning itself as a critical metals refining business, focused on extracting battery-grade materials from recycled feedstocks. According to Reuters, Nth Cycle launched commercial refining operations in Fairfield, Ohio, in 2024 and plans further expansion into South Carolina and the Netherlands by 2028.
The company’s growth strategy is built around its modular Oyster refining technology, which is designed to recover valuable metals while reducing costs and environmental impacts compared to traditional refining methods. Its European ambitions have also received institutional support, with the Netherlands project benefiting from a €7.5 million grant under the CRM Lion initiative, highlighting the growing importance of recycling within European critical mineral strategies.
Why Trafigura’s Commitment Matters
The participation of Trafigura, one of the world’s largest commodity trading houses, may be even more significant than the technology itself. Commodity traders do not commit to billion-dollar agreements simply because a project aligns with sustainability goals. They invest when they see a realistic opportunity to secure, market, and profit from strategically important materials.
Trafigura’s involvement sends a strong signal that recycled nickel, lithium, and other battery metals are becoming bankable commodities.
For recycling companies, three critical challenges often determine success:
- Securing a reliable supply of feedstock
- Refining materials at commercial scale
- Selling qualified products into global markets
A long-term offtake agreement with a major trader directly addresses the third challenge while also strengthening confidence in the first two.
Glencore’s Acquisition of Li-Cycle Highlights Industry Consolidation
Another major development demonstrating the growing value of battery recycling infrastructure is Glencore’s acquisition of Li-Cycle. As of August 2025, Li-Cycle became part of Glencore Battery Recycling, placing one of the industry’s most recognized recycling brands under the control of a global mining and commodity giant.
The acquisition illustrates an important trend: large mining and trading companies increasingly view battery recycling as a strategic extension of their existing metals businesses.
Glencore brings more than capital to the sector. Its strengths include:
- Global metal marketing networks
- Smelting expertise
- Refining infrastructure
- Recycling experience
- Established customer relationships
As the industry matures, these advantages could prove critical in building profitable circular supply chains.
Redwood Materials Expands Beyond Recycling
Another major player attracting attention is Redwood Materials, which continues to broaden its ambitions beyond traditional recycling. Reuters reported that Redwood raised US$350 million in a funding round led by Eclipse Ventures, with participation from NVentures, Nvidia’s investment arm.
The company recovers key battery materials such as:
- Lithium
- Nickel
- Copper
- Cobalt
Redwood is increasingly positioning itself as a broader circular-materials platform, with growing involvement in energy storage systems designed for electrical grids and data centers. Its strategy reflects the increasing convergence between battery recycling, energy infrastructure, and critical minerals supply chains.
European Leaders Continue Building Recycling Capacity
In Europe, Umicore remains one of the industry’s most established players.
The company reported that its Battery Recycling Solutions division continues to progress according to plan in 2026, reinforcing its position as one of the region’s leading battery-material recycling and refining companies. With decades of metallurgical expertise, Umicore offers something that many newer entrants are still working to achieve: industrial-scale credibility and proven refining capability.
Ascend Elements Highlights the Sector’s Financial Challenges
Despite growing momentum, battery recycling remains a complex and capital-intensive business. Ascend Elements illustrates both the opportunity and the risks.
The company signed a multi-year agreement with Trafigura covering 15,000 tonnes of recycled lithium carbonate scheduled for delivery between 2027 and 2031. Restructuring developments during 2026 underscored an important reality: securing offtake agreements does not automatically eliminate financing challenges, operational risks, or balance-sheet pressures. Execution remains just as important as market demand.
Feedstock Competition Is Becoming the Industry’s New Battleground
One of the most important developments in the sector is the growing competition for battery waste streams.
As recycling becomes more profitable, multiple industries are targeting the same material sources, including:
- Automakers
- Battery manufacturers
- Commodity traders
- Mining companies
- Specialized recyclers
As a result, feedstock security is becoming as important to recyclers as ore reserves are to mining companies. The companies that secure reliable access to battery scrap and end-of-life batteries may gain a significant long-term advantage.
European Policy Adds Momentum to Recycling Growth
Government policy is also supporting the industry’s expansion. Under the EU Critical Raw Materials Act, Europe aims to source 25% of its annual strategic raw material consumption from recycling by 2030.
This target reflects growing recognition that recycling cannot fully replace mining, but it can:
- Strengthen supply-chain resilience
- Reduce import dependence
- Lower environmental impacts
- Create domestic sources of critical battery materials
As a result, black mass is increasingly viewed as a strategic resource rather than a waste product.
The Future Belongs to Companies That Control the Entire Recycling Chain
The battery recycling sector is evolving rapidly, but the most successful companies are likely to be those that control every major stage of the value chain.
The strongest business models combine:
- Secure feedstock supply
- Efficient refining technology
- Battery-grade product qualification
- Long-term customer agreements
Nth Cycle has advanced through its partnership with Trafigura. Glencore has strengthened its position through the acquisition of Li-Cycle. Redwood Materials continues to scale a broader circular economy platform. Umicore brings industrial expertise, while Ascend Elements highlights both the opportunities and financial complexities of the sector. The message is becoming increasingly clear: black mass is no longer waste. It is a valuable and highly competitive source of critical battery materials, positioned at the center of the next generation of global commodity supply chains.
