Trafigura, one of the world’s largest metals traders, is doubling down on its bet on critical mineral recycling.
Earlier this month, just a few months after signing a multiyear offtake agreement for lithium carbonate with recycler Ascend Elements, the company signed a $1.1 billion, 10-year agreement with Nth Cycle, a U.S. critical metals refiner. Starting in 2028, Trafigura will purchase 2,000 metric tons of contained nickel in mixed hydroxide precipitate, and 1,500 metric tons of lithium carbonate annually — all coming from recycled feedstock. Nth Cycle will extract these products from approximately 12,000 metric tons of black mass, the dark, powdery substance that comes from shredding used batteries.
As one of the largest offtake agreements for recycled minerals in the West, the deal is a milestone for both critical minerals recycling and refining, according to Alexis Harmon, assistant director at the Atlantic Council’s Global Energy Center, where she focuses on the critical energy supply chain. “It’s a validation of recycling as a potentially game-changing part of the market,” she told Latitude Media. “Trafigura leaning into this complementary pathway in order to reduce the burden on primary mining is huge, because recycling can be a super important part of alleviating some of the supply chain crunch.”
Importantly, Nth Cycle’s commitment to refining the black mass within Europe and the U.S. addresses a structural bottleneck. While shredding capacity in the West has grown in recent years, refining has been lagging behind, with China controlling over 85% of global black mass refining capacity.
Megan O’Connor, co-founder and CEO of Nth Cycle, said that the company “has been hyper-focused on solving the challenge of why we don’t have refining capacity here for a number of critical minerals, but specifically for these types of recycled feedstocks,” O’Connor said, adding that the deal is “clear signal” of how valuable these materials are.
‘Black mass nationalism’
Among the reasons why the U.S. and Europe lack refining capacity for black mass is that the plants that have traditionally done the job in Asia are big and centralized, which makes them expensive and time-consuming to build. The model works if a country, like China, has vast amounts of black mass to feed them, justifying the capital intensity.
But, as O’Connor explains, these massive plants don’t pencil out in countries like the U.S., where the baseline cost of construction is higher, and the feedstock availability is lower.
“There’s a fundamental mismatch [with] the size of the market and the volumes that we have, especially in the black mass space,” O’Connor said. “We don’t have magical piles of batteries. It’s a very distributed source of materials.”
Nth Cycle has tackled the issue by designing modular facilities that can be as small as one-tenth the size of a regular black mass refining plant, which, according to O’Connor, can reduce the capital intensity by 70%.
This system, which the company has been using at its first commercial facility in Ohio since 2024, relies on a process called electro-extraction to generate and recycle refining chemicals on-site using electricity. Unlike traditional hydrometallurgical refining, the process eliminates the need for chemicals produced with fossil energy, which must be trucked in and generate a lot of waste.
Being smaller, Nth Cycle’s plants are also fast to deploy, taking as little as two years, according to O’Connor, and don’t require large amounts of feedstock to operate. A facility the company is building in the Netherlands that anchors Trafigura’s offtake deal, for example, will have an annual input of 6,000 metric tons, while traditional black mass refining plants can process as much as 80,000 metric tons.
Harmon described the rise of “black mass nationalism” where countries previously exported feedstock as waste are instead trying to keep their black mass and build up capacity to process it. And as Western companies ramp up that refining capacity, she anticipates a “fight for feedstock,” meaning companies like Nth Cycle that can operate with less may have a competitive advantage.
Nth Cycle hasn’t announced where it will procure the 12,000 metric tons of black mass needed to meet Trafigura’s offtake agreement, but O’Connor said the company is “already working with partners on that feedstock.”
Trafigura’s offtake will come from two new plants Nth Cycle is currently developing: Project SHIELD in South Carolina and a second unnamed facility in the Netherlands. Both are expected to come online in 2028, and the offtake agreement itself will likely be instrumental in helping Nth Cycle secure project financing.
And indeed, another key takeaway of this deal is that startups in critical minerals recycling and refining can land major offtakers, a fundamental requirement for scaling up new industries.
“Offtake has become even more important to critical minerals markets as we try to raise capital for projects in these difficult markets,” Harmon said. “And Trafigura is a Tier One offtaker.”
