ION Completes Recycling Pilot Plant FEED, expands into new feedstock

Our materials recycling Investment IonDrive (ASX:ION) just put out a company update with a few key bits of information packed into the announcement…

ION is developing recycling tech that differs from conventional metals recycling tech.

Typically recycling tech uses forms of pyromet (high heat/temperatures to treat waste) or Hydromet (acids/solvents to treat waste).

ION’s technology is different, using “Deep Eutectic Solvents (DES)” together with “benign organic solvents”.

Up until now, ION’s focus has been on processing black mass (shredded used batteries) and recovering battery grade lithium, nickel, manganese and cobalt.

ION’s tech has already proven very high recoveries in large lab-trials and the focus now for the company is to move the tech into a pilot plant scale setup.

In today’s announcement ION said that a contractor had been appointed for the FEED (Front End Engineering Design).

The same contractor would also be responsible for the EPC contract (Engineering, Procurement & Construction) at the end of the FEED studies - subject to a final investment decision from ION.

ION also confirmed commissioning of the plant was on track for 2025 via a mobile unit that can be moved to any location in the world.

A big reason for our Investment in ION is because of the valuation uplift we think the company will have once its pilot plant is up and running.

So the affirmation of a 2025 timeline for the pilot plant to be commissioned was good to see.

Next we will be watching out for news from the FEED studies, especially around costings for the plant.

The other big bit of news in today’s announcement:

There was another intriguing thing we noticed in today’s announcement, which was the mention of a move “into critical mineral processing, including testing new feedstock from the US”.

That’s the first time ION has talked about testing its technology on other sources of feedstock AND for new minerals…

ION explicitly mentioned “[the company] evaluating mixed hydroxide precipitate (MHP) as a potential feedstock”, which tells us the company is looking at the potential of its tech in a much bigger market.

Minerals processing is a huge market which affects basically any company that mines and process’ raw materials.

Efficiencies in the processing flowsheets with the ability to improve recoveries can have huge cumulative financial effects for the major players in these industries.

ION’s team would know all about it too, non-exec director Hugo Schumann was the former CFO of Jetti Resources which developed copper extraction tech.

Jetti went onto raise Series C funding of $50M, Series D funding of $160M which valued the company at $2.5BN in 2022.

Jetti was backed by top industry investors like Freeport, BHP, Mitsubishi and Blackrock - proof of the maturity of the minerals processing industry relative to the recycling industry.

(Source)

Jetti’s tech is being developed for copper extraction.

Today’s announcement tells us ION is looking to test its tech on the nickel industry.

ION said it would be testing its tech on “mixed hydroxide precipitate (MHP)” which comes from nickel laterite ores and typically contains ~40% nickel and 1-10% cobalt.

(Nickel laterite projects are like the mega mines that are producing most of the world’s supply in Indonesia right now).

ION will be testing to see if it can convert MHP directly into battery grade nickel/cobalt products.

We will definitely be watching to see how ION goes with those tests.

So all up, what we liked the most about ION going after the minerals processing space, was that it is a signal ION could look to apply its tech to multiple different sources of feedstock.

This optionality could be important in a battery metals space that is notoriously volatile.

There’s a good example of how expansion into new materials in the recycling space can benefit an ASX company too…

For example, that strategy has worked out pretty well for another listed company on the ASX - MTM Critical Metals which has applied its “flash joule heating” (a form of pyromet) technology to multiple sources of feedstock and put out announcements recovering everything from gold to gallium.

MTM has gone from ~2.5 to a high of ~30c off that newsflow.

Past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

We’re hoping that ION can secure a similar or ideally larger re-rate as it moves forward with its pilot plant and potentially tries out different feedstock.

It’ll be a very busy year of execution for ION, here’s what we’re looking ahead to.

What’s next for ION?

ION has completed economic modelling for its pilot plant and after today’s announcement has a FEED contractor appointed.

Next we want to see the company make progress with the design development for the plant.

We will also be looking for updates on the results from the ongoing optimization tests and semi-continuous testing.

Objective #2: Design and build pilot plant

The pilot plant will set the stage for ION to better develop its technology, and provide potential samples to offtake customers.

Milestones
🔄 Complete design of pilot plant
🔄 Lock in EPCM contract for the build
🔲 Start construction on pilot plant
🔲 Complete pilot plant construction

Source: “What do we expect ION to deliver?” - ION Investment Memo 3 December 2024

(NEW) - Outcomes of MHP testing for critical mineral processing

We are also looking forward to seeing the results from the tests ION will be doing on MHP feedstock.

This sits outside of the objectives we set for ION in our Investment Memo.

BUT a big part of the reason why we Invested in ION was because we believed that at some point its technology could be tested in parallel industries.

Innovation pipeline - more types of recycling tech for different critical metals.

ION has a strategic partnership with the University of Adelaide. ION will get first look at any new technologies developed under a $5M grant by the Australian Research Council which is overseen by the two professors that developed ION’s current DES recycling technology.

Source: “Why we Invested in ION” - ION Investment Memo 3 December 2024

Read more about ION in our most recent note:

ION: Tech to extract critical minerals from old electronic products