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        IMA

Recycling: BASF/Heraeus’s facility in China for recovery of precious metals; Loop/Reed in US$66 mn jv tie-up for PET recycling tech in Europe

BASF/Heraeus’s facility in China for recovery of precious metals

BASF Environmental Catalyst and Metal Solutions (ECMS) and Heraeus Precious Metals have commenced operations of a new joint venture facility, BASF Heraeus Metal Resource Co (BHMR) located in Pinghu, China. The facility recovers precious metals from spent automotive catalysts, enabling a circular economy, while supporting China’s security of supply and sustainability goals.

The facility is a 50:50 joint venture between the two industrial leaders and involved a mid-double digit million Euro investment. Construction was completed in 16 months. On an area of 32,000 sq m and with over 100 employees, BHMR has a recycling capacity of approximately 10,000 tonnes/year of autocatalysts. The commencing of operations comes at a crucial juncture with the earliest PGM-carrying automobiles enter the recycling phase.

China relies heavily on imported precious metals due to limited domestic supplies. This highlights the importance of recycling to meet the country's needs, particularly for essential metals like platinum, palladium and rhodium, which are utilised in various industries such as petrochemicals, pharmaceuticals and automobiles.

According to market research, the Chinese autocatalyst recycling market is expected to experience remarkable growth, with an estimated annual growth rate of 18%.

Hu Min, Head of Heraeus Precious Metals China, explained "The establishment of the joint venture will not only help our customers to buy their precious metals from a sustainable and traceable source, but also contribute a stable supply for China's precious metals supply chain."

Recycling precious metals offers a substantial reduction in carbon footprint, potentially saving up to 98% of carbon emissions compared to mining operations.

“Our investment in the joint venture is part of a global EUR300 million recycling expansion program spanning China, the USA and Germany,” emphasied Marius Vigener, Senior Vice President Business Line Chemicals at Heraeus Precious Metals. “It will support our customers by meeting their increasing demand for low carbon footprint products. This commitment to sustainable development benefits not only both companies but also the wider PGM and downstream industries.”

Loop/Reed in US$66 mn jv tie-up for PET recycling tech in Europe

Meanwhile in other news, Canadian clean tech firm Loop Industries, which is accelerating a circular plastics economy by manufacturing 100% recycled polyethylene terephthalate (PET) plastic and polyester fibre, announced that the company has signed a non-binding Memorandum of Understanding (MOU) with Reed, a European investment firm focused on high impact and technology-enabled infrastructure.

Loop and Reed intend to form a strategic long-term partnership through the establishment of a 50/50 joint venture to commercialise Loop’s technology in Europe. Reed intends to provide financing of US$66 million in non-dilutive capital. Of this amount, US$33 million is to be provided to Loop as non-dilutive capital to fund Loop’s technology commercialisation globally. The remaining US$33 million is to be invested in the jv.  

The non-binding MOU is subject to customary due diligence and the fulfillment of certain pre-closing conditions. The transaction is expected to close by the end of March 2024.

Under the terms of the MOU, Reed will provide capital as follows:

  • US$11 million equity investment in the JV to acquire from Loop exclusive rights to co-invest alongside Loop in commercialisation projects using Loop’s technology in Europe through the planned joint venture between Loop and Reed;

  • US$22 million loan from the JV to Loop in two equal tranches – first tranche paid at closing and second tranche paid in the following 12 months with both tranches having a 10% PIK rate and 3-year term;

  • US$33 million commitment to cover initial costs to develop projects in Europe, including Loop’s equity contribution to the previously announced JV to construct an Infinite Loop plant in Saint-Avold, France;

  • Any subsequent capital injections in the jv will be funded on a 50/50 basis between Reed and Loop.

The planned 50/50 jv will be formed to invest in projects across Europe to commercialise Loop’s technology.

The planned partnership with Reed leverages the in-depth industry experience of Reed’s leadership in the development and financing of infrastructure projects throughout Europe as well as their established financing relationships with major institutions.

This intended partnership allows for Loop Industries to reduce the funding needs for its equity contributions to support the rollout of an increased number of facilities to be constructed in the European market using the Infinite Loop™ technology. Loop Industries will receive royalty and engineering fees directly from the planned facilities in Europe.

Daniel Solomita, Founder/CEO of Loop Industries, commented “We are delighted to form a partnership with Reed, which has been a long-standing supporter of Loop’s groundbreaking technology. We believe that this partnership, which combines Reed’s extensive financing relationships and experience in the development of major capital projects with Loop’s innovative technology, will be invaluable in the next stage of Loop’s strategic development, and maximise our opportunity to penetrate the European market as brands adapt to increasingly stringent regulatory requirements for plastic recycling.”

(IMA)


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