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Aqua Metals’ DeepDive Ep. 2: Strategic Partnership

INTRO: Welcome to the second episode of Aqua Metals’ DeepDive, the audio podcast where we take a closer look at technology updates, recent news and announcements from Aqua Metals.  

In today’s episode, we will discuss two major announcements from Aqua Metals this week – including both our strategic partnership with Yulho and our successful capital raise.  

Please welcome Steve Cotton, the President and CEO of Aqua Metals. Steve, thank you for being here. 

Steve Cotton: Thanks Russell – I’m glad we have these opportunities to share more about our recent announcements. This is really an exciting time for Aqua Metals! 


So, the big news today is the company entering a strategic partnership with South Korea-based Yulho. Tell us a little more about this partnership. 

SC: Absolutely. The partnership with Yulho is a significant step forward for Aqua Metals strategically, and they are an ideal partner for our current and future growth plans. 

We have been in discussions with Yulho for several months, and recently hosted their senior leadership at our state-of-the-art pilot recycling facility, right here in Tahoe-Reno. Yulho was thoroughly impressed, of course, with our operations and core technology – and they saw first-hand how we sustainably recycle spent lithium batteries back into high-purity metals like the nickel and the cobalt, and refined products like lithium hydroxide for battery manufacturing. 

So, you see, Yulho – through its subsidiary Yulho Materials – is another key part of the circular lithium battery supply chain. Yulho is building what they – and what we believe will be the largest ‘black mass’ production facility in South Korea, which of course is a big deal because it’s a leading global market for electric vehicles and lithium batteries, and the critical minerals that power all these clean energy technologies.

Black mass is the mixture of materials from the crushed-up batteries, and that serves as the input to Aqua Metals’ sustainable recycling process. Yulho’s proprietary process for creating these high-purity black mass materials doesn’t rely on furnaces, and instead, they also use electricity-powered equipment, including those shredders that they use to produce this hard-to-get commodity. 


Interesting – so Yulho Materials is a growing lithium battery black mass producer, soon to be the largest in South Korea. And black mass is the raw material that Aqua Metals recycles back into high purity metals? 

SC: Exactly. They completed a successful pilot utilizing their own innovative technology and are currently building an 8,000 tonne per year black mass facility, with plans to scale that to 24,000 tonnes. 

Yulho’s established presence in South Korea’s electric vehicle and critical minerals market is particularly exciting for us.  

And they have provided us exceptional samples of the black mass that they are producing from manufacturing scraps from three of the largest cell manufacturers in South Korea as well as end-of-life batteries. And that’s confirming for us the quality of both their supply and their process. 

So it is easy to see how we are natural allies in the circular economy, with aligned interests and a shared understanding of each other’s business. 

Through mutual expertise and growing global partnerships, Aqua Metals and Yulho aim to drive innovation in lithium battery recycling and set a new standard for a low-carbon, circular supply of critical minerals that power an electrified future.  

But, this strategic partnership is actually not focused on the supply of black mass for Aqua Metals’ commercial operations in the US, this is a much bigger endeavor we are embarking on into global markets.


That’s right. So Yulho is already established and growing, working with some of the world’s largest EV and battery companies to process thousands of tons of battery materials. Take us through some more of the specific elements of this new partnership. 

SC: We are really excited about this, Russell. I’ll break up the main components of our strategic partnership with Yulho into 3 parts – what is happening today, what we are building together, and our plans together for the future, together.  

So today, initiating this partnership Yulho is making a strategic equity investment by Yulho into Aqua Metals of $5 million, underscoring Yulho’s confidence in Aqua Metals’ transformative technology and demonstrated results at our pilot-scale facility. 

This capital investment combined with our capital raise this week – which we’ll come back to after discussing Yulho – provides Aqua Metals the necessary funding for our operations and to continuing building our own 10,000 tonne commercial-scale facility, right here in Tahoe-Reno. We see this investment by Yulho as a long-term commitment to the success of Aqua Metals, and to the partnership itself. 

Now, that in itself is a big deal, but let’s discuss the crux of the partnership and what we are building together. 

We are currently negotiating final terms to license our patented AquaRefining technology for Yulho’s use in South Korea. This will allow Yulho to build and operate its own facilities to sustainably convert the black mass it already produces into high-purity metals like the nickel, cobalt, and copper, and battery-grade products like lithium hydroxide and manganese dioxide, that we’re already producing here.  

This is huge for Yulho and will give them a distinct advantage in South Korea over any other companies. The licensing agreement will allow for up to 100,000 tonnes of material processed per year using the sustainable AquaRefining process – which again replaces polluting furnaces and intensive chemicals and is driven by clean electricity. 

Based on the average contents of a tonne of black mass, 100,000 tonnes is enough raw material to produce nearly 1 million new electric vehicle batteries per year, and represents a $2 billion dollar market opportunity in South Korea that the companies will share in. 

This will be Aqua Metals first time licensing our lithium recycling technology, and Yulho is an ideal fit as a strategic partner. 

In collaboration with our amazing engineers and operators, we expect Yulho to embed engineering and technical resources with us in Tahoe-Reno later this year as we deploy our phase one of our campus so they can then be equipped to deploy Aqua Metals AquaRefining technology in South Korea, in Yulho’s own facilities, serving the goal of getting both facilities up and running as quickly and efficiently as possible. 

Yulho will operate their facilities themselves, and we expect that they will commence with their first AquaRefining facility in South Korea in 2024-2025. 


That is tremendous. Aqua Metals’ first licensing deal for its lithium battery recycling technology is a multi-billion-dollar opportunity and receiving a sizeable investment in the company to fuel commercial growth. 

SC: Now this strategic partnership sounds like it is focused on South Korea at first – which itself is a major epicenter for lithium batteries – but you alluded to bigger plans in the future. How do you expect the partnership to develop? 

That’s right – the initial license is for recycling in South Korea, but the companies laid out within the agreement can expand to other global markets in Asia and the European Union. 

So, to the future of the partnership – what does all this mean. 

Well, one of the key reasons that Yulho has been so successful to date is its established partnerships with leading EV and battery manufacturing companies. Black mass producers need a steady supply of input materials – manufacturing scrap and retired batteries – and Yulho is currently scaling as quickly as it can to keep up with supply.  

And in turn, these manufacturers need high-quality metals that are produced through AquaRefining – providing valuable off-takers for low-carbon battery materials in the future. 

But while South Korea itself is a global hub for battery technology and manufacturing, its biggest companies are spread across the globe, with manufacturing hubs across Asia, the EU, and the Americas. These same companies that supply Yulho today – and others from around the world – will need similar partners near their global manufacturing facilities, and that is where we envision this partnership ultimately heading in the future. 

This is a pivotal step in our long-term vision for global growth. We anticipate that Yulho will continue scaling its operations in South Korea to meet surging demand for battery recycling, while pioneering a sustainable circular economy for lithium batteries in their home country.

As opportunities for expansion in Asia and the European Union develop and countries invest further in clean energy manufacturing, we can then work together with Yulho to expand into these additional markets as well. 

So, South Korea will be the first global outpost for Aqua Metals revolutionary sustainable battery recycling technology, but this partnership paves the way for further global expansion in the future, so this is a big deal for Aqua Metals and the entire lithium battery industry. Accelerating the deployment of cost-effective, sustainable lithium battery recycling, Aqua Metals and Yulho are really poised to transform the battery materials supply chain. 


Wow – it’s always exciting to see the future begin to take shape, and I am sure there will be plenty more to share in the coming months.  

There was another major announcement this week, and I want to make sure we spend some time discussing it. Aqua Metals also completed a successful multi-million-dollar capital raise, can you share more about that and what it means for the company? 

SC: That’s right – another significant milestone, and more fuel for Aqua Metals’ growth. 

In addition to the direct offering to Yulho, this week, Aqua Metals undertook an underwritten public offering of common shares of stock to raise capital. We are very pleased with the results of this strategic capital raise and the confidence expressed by investors in our fundamentals and our strategy for going forward. 

This combined funding is essential for Aqua Metals in two ways. 

First, this capital will be used in part to continue building our first commercial-scale facility, a five-acre recycling campus, right here in Tahoe-Reno, designed to process 10,000 tonnes of black mass a year. 

We are already well underway with developing the existing building on site and have shared some pictures recently as we start to move in equipment and get facilities built out. And with our pilot facility becoming officially operational earlier this month, at 24 hours and day and 5 days a week, our senior engineering team has already moved into the new office space there, a mile and change down the road, so they are able to dedicate themselves to accelerating the continued upfit of the building and commissioning. 

Second, this capital is also a necessary component of other non-dilutive funding sources that Aqua Metals is pursuing. As we have previously discussed, Aqua Metals is applying for a loan with very favorable terms, guaranteed by the USDA, and one of the requirements of these types of loans is necessary capital on hand, which we now have. And similarly, many of the grant and loan application programs managed by the Department of Energy and federal agencies will have cost-share and capital requirements. 

By raising these funds today, we not only get necessary capital for equipment and operations – but we are also able to access larger funding opportunities in the future, even including traditional debt-financing. 


It sounds like this capital is exactly what is needed for Aqua Metals to continue scaling its operations and the strategic phased build out of the first commercial-scale AquaRefinery. 

What does this mean for current Aqua Metals investors? 

 SC: Well, this capital raise is financed with what’s commonly called a ‘shelf offering’ – meaning Aqua Metals sold shares of common stock that were not previously in circulation as a vehicle to raise capital. 

This means there are now more shares of Aqua Metals stock being publicly traded in total, but also that the company has a more robust balance sheet, and cash position and value because of the investments received. 

We believe this is a net positive for investors and makes Aqua Metals an even stronger company going forward. 

The combination of funding secured, and the future revenue opportunities captured through our strategic partnership and licensing agreement with Yulho really do position Aqua Metals well for continued success as a pioneer in sustainable lithium battery recycling.  


That’s truly exciting. It’s clear that Aqua Metals is at the front of sustainable recycling.  

As we wrap up, could you share some final thoughts on the future of Aqua Metals and the industry? 

SC: Absolutely, Russell. Aqua Metals is in the midst of shaping our future success.  

The partnership with Yulho and our expanding strategic partnerships demonstrate our commitment to sustainable innovation and further establish Aqua Metals as a global leader in the critical mission of recycling lithium batteries. We are dedicated to fostering a sustainable future by reducing environmental impact and driving the circular economy for battery materials. 

Moving forward, we will continue to advance our commercial operations, expand our global reach, and seek out new opportunities for growth and collaboration. By capitalizing on our financial stability, technological expertise, and strategic partnerships, we feel we are really poised to revolutionize the lithium battery industry and make a lasting positive impact for the climate. 


Thank you, Steve, for joining us today and sharing your insights into Aqua Metals’ strategic partnership. It’s been an enlightening conversation. 

And thank you for tuning in to Aqua Metals’ DeepDive.  

 DISCLAIMER: This podcast is as of the date of recording and may contain forward-looking statements that are based on Aqua Metals’ management’s current expectations and beliefs. 

We encourage you to review our Investor Relations website at ir.aquametals.com for a more detailed discussion of the risks and uncertainties associated with forward-looking statements, and for the most current information about the company. 

[Recorded on 7/18/23]