ASX-listed Lithium Australia is closing in on full ownership of its 90 per cent owned subsidiary, Envirostream Australia, after agreeing to terms for the acquisition of the final 10 per cent of the battery recycling company. Management says with the Battery Stewardship Scheme, or “BSS” now in full swing and the stockpile of used batteries ever increasing, the move is a “strategic imperative”.
The outstanding 10 per cent of Envirostream is held by its Managing Director Andrew Mackenzie and Lithium Australia will part with around $250,000 to secure the final slice of the battery recycler. It expects the deal to be wrapped up in a month or so, with negotiations now in an “advanced stage”.
Mr. Mackenzie is expected to remain as Envirostream's Managing Director following the conclusion of the acquisition.
Envirostream is Australia’s only EPA-permitted and licensed recycler of mixed batteries. All lithium-ion and alkaline battery components are collected, sorted, and shredded as part of its services.
The BSS is an industry-led initiative that aims to provide Australian consumers with free battery recycling services.
Lithium Australia’s Managing Director Adrian Griffin said:“As Australia’s only EPA-permitted and licensed recycler of mixed batteries, including lithium-ion batteries, Envirostream is setting the standard for world’s best practice, with safe storage facilities, limiting of battery quantities onsite and firewall isolation of storage compartments. The Company's goal is to keep spent batteries out of landfill, handle them safely and efficiently and return as much as possible of the critical materials they contain to the battery industry to improve sustainability.”
The CSIRO estimates that Australia produces around 3,000 tonnes of lithium-ion battery waste per year. Surprisingly, only 2 per cent of this material gets recycled. Australia’s chief scientific body says this waste could grow to exceed 100,000 tonnes by 2036.
The vast majority of Australia's wasted batteries are shipped overseas and disposed of in landfill. The technique presents a number of environmental problems, including groundwater contamination and potentially battery-related fires.
Lithium Australia’s move to acquire the remaining slice of Envirostream follows news the recycler was gearing up to open a second battery recycling plant in Laverton, Victoria.
Envirostream says the new site is permitted to collect spent batteries and electronic waste and will also use the facility to store, sort, shred and separate battery material, ultimately culminating in the sale of recycled battery products to a host of national and international customers.
The new acquisition expands Envirostream’s storage capacity by about 300 per cent and its sorting capacity by around 100 per cent.
The new Victorian site has the capacity to hold close to 300 tonnes of batteries, enabling a major expansion of recycling activities. Envirostream's timing appears to be spot on too, with a surge in used batteries expected as a result of the national Battery Stewardship Scheme's handheld-battery collection network.
Lithium Australia’s decision to mop up the rest of its Envirostream subsidiary may be a shrewd purchase for the company given its subsidiary lays claim to be the country's only fully integrated mixed-battery recycling business. Importantly, the purchase gives its new 100 per cent owner the ability to have its foot on another significant part of the battery revolution without the hassle of ensuring that minor shareholders can keep up with its plans and funding requirements.
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By Matt Birney
