The Neometals Ltd (ASX: NMT) share price is leading the broad indices today and is now 14.94% higher at $1.38.
Neometals shares are catching bids as investors respond positively to a company announcement regarding Primobius, a 50/50 joint venture (JV) owned by Neometals and SMS group GmbH.
Why is the Neometals share price spiking today?
The Neometals share price is soaring after the company advised its JV has executed binding option and licensing agreements with Stelco.
Neometals says Stelco is a wholly owned subsidiary of Stelco Holdings Inc (TSX: STLC), a Toronto Stock Exchange-listed steelmaking company headquartered in Ontario, Canada.
Stelco and Primobius entered into a memorandum of understanding earlier in the year to evaluate future joint lithium-ion battery recycling operations.
The parties worked together towards a significant North American lithium-ion battery recycling business plan and have now entered into binding formal arrangements.
These agreements allow Stelco to accelerate its sourcing of feedstock. Additionally, Primobius may consider equity ownership of a battery recycling special purpose vehicle (SPV) that would be responsible for battery recycling operations.
Specifically, Primobius has exclusively licensed its battery recycling technology to the SPV in the field of end-of-life vehicle battery processing. This move will enable it to “advance commercial battery feedstock sourcing agreements and advance its approvals processes”.
Under a separate option agreement, Primobius can elect to acquire between 25% and 50% equity in the SPV under certain stipulations. In the event the option is not exercised, Primobius will be entitled to a gross revenue royalty.
Neometals says the SPV will “help meet the need for multiple large recycling facilities to manage significant anticipated volumes from end-of-life electric vehicle batteries originating from the world’s fastest-growing cell making jurisdiction”.
Stelco is now in a position to mature its feedstock targeting activities with direct access to a sustainable industrial-scale recycling solution backed by SMS, according to the release.
Speaking on the announcement fuelling the Neometals share price, managing director Chris Reed said:
Neometals is understandably excited by the speed of commercial progress being made by Primobius. We recognise both the need to partner to secure access to large volumes of end-of-life LIB’s to ensure future growth and the present need to recycle significantly growing volumes of production scrap from LIB cell production in the US. Stelco is a leading supplier of steel to the Automotive OEMs and consumes scrap as part of its steel manufacturing process and presents the perfect opportunity for Primobius to enter the North American market as partners.
Our 10tpd commercial disposal plant in Germany addresses the needs of the LIB supply chain in Europe and builds our operating expertise as principal, further de-risking and enhancing the value of partnering with Primobius. Our impressive pipeline of development opportunities is reshaping our short-term strategy and we are prioritising market penetration over our ambitions to operate as principal. Primobius’ flexible business models remain as key unique selling points.
The Neometals share price will finish the year well in the green, having climbed 420% in that time. It has also rallied more than 29% in the last month of trading.
The post Neometals (ASX:NMT) share price explodes 15% on battery recycling update appeared first on The Motley Fool Australia.
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