Metals recycling and refining firm Aqua Metals has signed a non-binding Memorandum of Understanding (MOU) with lithium iron phosphate (LFP) battery cell manufacturer American Battery Factory (ABF) proposing a strategic collaboration focused on advancing the US battery materials supply chain through recycling and circular manufacturing.

The companies intend to evaluate the co-location of a commercial Aqua Metals lithium-ion battery recycling facility adjacent to ABF’s planned battery cell manufacturing operations in Tucson, Arizona.

The facility would be capable of processing up to 10,000 metric tons of lithium-ion battery materials annually, including manufacturing scrap and third-party feedstock.

Aqua’s AquaRefining technology replaces high-temperature furnaces and chemical-intensive hydrometallurgical processes with an electricity-powered, closed-loop system. The proposed collaboration would enable Aqua Metals to recycle lithium-ion battery manufacturing scrap generated by ABF and supply battery-grade lithium carbonate back into ABF’s supply chain or to downstream partners.

By integrating recycling directly into battery manufacturing, the companies said they aim to improve cost competitiveness, reduce logistical complexity and strengthen domestic supply chain resilience.

The companies also expect to evaluate how domestic manufacturing incentives, including the 45X Advanced Manufacturing Production Tax Credit, could further support the economic competitiveness of US-based battery materials production.

Any definitive agreements would be subject to financing, permitting, and regulatory approvals and would target the start of commercial operations in 2028, the companies said.

“This strategic collaboration reflects our belief that domestic battery recycling must be economically viable, not just environmentally preferable,” said Steve Cotton, President and CEO of Aqua Metals. “By working alongside American Battery Factory, we are evaluating a model that would keep valuable materials in circulation, support US manufacturing jobs, and offer a realistic alternative to exporting battery scrap overseas for processing methods that simply do not translate well to the United States.”

Source: Aqua Metals