Lithium-ion battery recycler Aqua Metals said it needs cash to finish its Sierra Arc black mass recycling plant. It signed a non-binding term sheet in May for up to $33 million in secured credit but the lender has now said it is suspending further activity with regard to the credit.
This is due to continued high interest rates and recent decline in lithium-ion prices, including an over 25% drop in lithium carbonate pricing, said Aqua Metals.
The lender expressed concerns about Aqua Metals’ ability to service the debt, which followed two months of due diligence. Aqua Metals will “actively pursue” the required funding via other options, including debt, project finance, joint venture and strategic investments.
It has reduced its workforce hired in expectation of completing the Sierra Arc but expects to maintain pilot operations. It will push commissioning into 2025 from late 2024. The company said it expects the workforce reduction, asset disposal, deferral of some costs and more standard equipment leasing will provide around one year of cash runway with no other sources of cash.
Its cash pile has more than halved to $7.8 million at end-June from the end of December and operating losses have widened to $11.4 million from $9.3 million six months earlier.
In the summer issue of BEST, we reported how the black mass recycling market lacks equilibrium and how the overcapacity will cause casualties.
