By Anne Kauranen
HARJAVALTA, Finland (Reuters) - Finnish utility Fortum said on Tuesday it has begun recovering raw materials from the "black mass" of electric vehicle batteries at its new recycling facility in Finland.
Black mass is the shredded material which comes from used batteries, which can include lithium, cobalt, and nickel. These metals can then be extracted and used to make new batteries.
Carmakers such as Tesla, Volkswagen (ETR:VOWG_p) and Stellantis are accelerating their drive to secure these scarce battery raw materials, while the European Union is tightening its regulation on recycling them.
Fortum said it had invested some 27 million euros ($30 million) in the new facility, which it called the first of a kind in Europe, in Harjavalta, southwestern Finland.
It said it would be able to recover 95% of the raw materials contained in the black mass of lithium-ion batteries, to produce a sulphate of nickel and cobalt for reuse in car batteries.
"Others don't have this and it will be a while before they do," Fortum's head of batteries Tero Hollander said.
Research firm MarketsandMarkets estimates the lithium-ion battery recycling market to grow to $35.1 billion by 2031, from $6.5 billion in 2022.
Commodity prices for battery materials have fallen this year after peaking for the past two years but Fortum said the long-term expectation is that demand will explode.
"The need for battery materials is huge and Europe has very limited raw materials production of its own," Hollander said.
Several European companies have announced plans for battery recycling facilities but few are in commercial production.
Fortum's European rivals include battery maker Northvolt which is developing a similar plant in Sweden for raw materials recovery from black mass, which it already produces together with Norsk Hydro in Norway.
Belgium-based Umicore is planning to build a battery recycling plant in Europe by 2026, while Germany's BASF is ramping up a battery plant in eastern Germany where it is also planning to recycle used materials.
Fortum said it plans to expand the new facility by 2025 to also recover lithium.
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