Neometals Limited has signed a binding term sheet to divest its 50 per cent stakes in Primobius GmbH and ACN 630, its lithium-ion battery recycling joint ventures with diversified infrastructure firm SMS Group GmbH, for €5 million (A$8.9 million) in cash plus a 2 per cent revenue-based compensation fee, capped at €7 million (A$12.5 million) until 2037.
The deal, subject to regulatory and shareholder approvals, frees Neometals from future capital demands during Primobius’ development phase.
The move follows a strategic review highlighting challenges in Europe’s lithium-ion battery recycling market, driven by slower-than-expected electric vehicle adoption and high-cost United States gas replacing Russian supplies, which have seriously scarred Germany’s industrial competitiveness.
In 2024, Germany’s EV market faced headwinds after subsidy cuts led to a 27.4 per cent drop in registrations, with excess inventory left sitting in manufacturers’ yards.
However, the first half of this year has seen a rebound, with EV sales up 35.1 per cent and Volkswagen boosting production, signalling renewed demand for battery materials. This recovery aligns with Neometals’ shift to capitalise on emerging opportunities.
Neometals Ltd managing director Chris Reed said: “We are proud of the pioneering role we’ve played in conceiving and developing the hydro-metallurgical battery recycling technology and the progress made through the Primobius JV.”
By exiting Primobius, the company avoids capital-intensive commitments while retaining revenue exposure, enabling a focus on projects such as its fully owned Barrambie gold and titanium-vanadium projects in Western Australia. Neometals is busy advancing its critical minerals targets towards a final investment decision with strong partner interest.
The company’s portfolio also includes vanadium recovery technology and lithium chemical opportunities, which offer near-term value potential. These projects will harness Neometals’ expertise in sustainable processing to capitalise on global demand for battery and renewable energy materials.
In June, Neometals reported an initial inferred mineral resource estimate of 250,000 tonnes of gold at 1.6 grams per tonne for 13,000 ounces at its Ironclad deposit, which forms part of the Barrambie gold project near Sandstone in WA’s Mid West region.
The company has prioritised Ironclad for potential development and mining due to the mineability of its shallow gold mineralisation.
It has other gold prospects within the 40km strike of the Barrambie ground awaiting further modern exploration and evaluation, including Mystery, Barrambie Ranges and Kismet.
The recycling divestment aims to ensure Neometals avoids significant working capital commitments while securing immediate cash and long-term revenue exposure through Primobius’ operations.
This strategic shift positions the company to maximise shareholder value in a potentially difficult global market, with formal agreements expected later this quarter.
Neometals’ exit from lithium battery recycling underscores the company’s agile approach to capital allocation, including redirecting its resources to high-potential projects such as its Barrambie project.
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By Doug Bright
