Staff Reporter
11 July 2024 15:44
Lithium Australia’s lithium ion battery (LIB) recycling subsidiary Envirostream Australia has achieved a significant milestone, delivering its first positive operating profit during Q4 FY24.
The achievement was driven by the company’s transition towards an upstream service model, which has increased revenues with a higher proportion of revenues now received upfront through recycling fees.
Lithium Australia CEO and Managing Director Simon Linge said: “This outcome, delivered in a period of low commodity prices, was driven by our growth in our fee for service model for battery recycling with all customers over the last year, which enables us to receive the majority of revenue upfront on improved terms.
“Our revised commercial model supports our ongoing joint development discussions with SungEel HiTech, which seek to scale up our operations in line with expected growth in LIB collection volumes.”
In Q4 FY24, Envirostream achieved lithium ion battery collection volumes of 445 tonnes, revenue of $2.50m, gross profit of $1.56m and an Operating Cash Profit of $0.52m.
Lithium Australia General Manager – Recycling Steven Marshall said the operation had achieved improved unit economics, driven by the increased collection volumes of large-format LIBs from exclusive recycling services agreements with leading OEMs3.
These agreements were made possible through safety and operational improvements, while the company also reduced its exposure to market volatility relating to commodity prices, including mixed metal dust (MMD), a key processed output.
Key operational changes employed included:
Optimising battery collections mix through a decision to focus on large-format LIB collections and cease collection contracts for other battery types
And processing upgrades: Including the upgrade of the battery shredder, which has significantly improved the recovery of MMD and processing throughput.
Further reading:
Lithium Australia boosts battery recycling
Picture: Lithium Australia/battery recycling at Envirostream