If the world is to keep global warming under 2C, then demand for lithium could increase by over 40 times by 2040, according to projections from the International Energy Agency (IEA). This boom will be driven to a large extent by the need for lithium-ion batteries, particularly for electric vehicles (EVs).
Latin America is home to roughly 60% of the world’s known lithium reserves. But what promises to be a development opportunity for the region is also an environmental threat. With few initiatives to add value to their extracted lithium, Latin American countries rely on exporting the raw material. This model risks reproducing long-standing inequalities with the Global North, and the environmental impacts and social tensions they bring.
Battery recycling is emerging as an alternative, capable of reducing the impacts of lithium mining. The IEA projects that a successful increase in recycling could lower by a quarter the global requirements for new lithium mine developments between now and 2050.
Currently, the material recovered by the recycling market represents less than 5% of global battery metal production. Closing this gap with newly mined inputs would be a big step forward, experts tell Dialogue Earth. Others, meanwhile, say that given Latin America’s ample raw materials, efforts should be focussed on making mining more sustainable.
The recycling path
Dialogue Earth consulted Fransisco Pereira, a project manager at the Costa Rican recycling company Fortech. He says that when a lithium-ion battery reaches the end of its useful life in an EV, it usually still has enough capacity for a less demanding application. Since 2023, Fortech has launched several initiatives to process such batteries.
Those with enough life may be assembled into new systems for such uses as solar energy storage in homes, EV charging stations and various industrial applications.
Exhausted batteries, meanwhile, can be recycled. They are disassembled and processed to remove materials like plastics. Then they are shredded to create “black mass” – a powder containing the critical metals lithium, cobalt, nickel, graphite and manganese. These metals are then recovered and refined from the black mass using processes based on heat or chemical solutions.
The resulting products can then be integrated into a closed circuit, where they become raw material for the manufacture of new batteries. Or they can be put to a different use entirely.
Recycled critical minerals generate 80% less emissions than mined materials, the IEA report states, as well as helping to reduce waste and water use. But the complex compositions of batteries, as well as their high residual energy charge that poses overheating risks, make recycling a technological challenge.
Only a few countries have companies that can carry out all the steps necessary to recycle a lithium-ion battery. These include China, Japan, South Korea, Belgium, Finland, France, Germany and the United States, according to a 2020 study.
Low collection rates are a common problem, because batteries are classified as hazardous waste. There are also high transportation costs, potential safety issues, and differences in protocols and regulations between countries.
Extracting and reusing lithium is also labour-intensive and expensive, as many batteries can still only be disassembled manually. This raises the possibility of the process being carried out in countries with lower labour costs and increases the risk of human rights violations.
Battery recycling is also not without its own environmental impacts. If mismanaged, it can cause pollution from discarded waste, contaminate water and release harmful emissions, warns the IEA.
The Latin American dilemma
Latin America’s critical minerals market is worth some USD 180 billion, or 25% of the world market, according to a 2024 report by the Latin American Energy Organisation (Olade). The region has at least 52% of the world’s lithium reserves and 38% of its copper and molybdenum reserves. However, the rates of collection of critical minerals in the region are said to be less than 5%, compared to 30% in Japan or 40% to 50% in Europe and North America.
Although Latin America holds most of the reserves, there is little value-added processing of lithium. The recycling rate of the metal in the region stands at 0%, according to the same report.
The situation becomes even more complex when one considers the vastly inferior processing capabilities of countries outside China, which accounts for about 80% of the world’s battery-recycling capacity.
For Félix Requejo, director of the Research Institute of Theoretical and Applied
Physical Chemistry (INIFTA) in Argentina, countries with reserves have two options: “Hand over the primary resources, buy the cells and recycle them here, which generates foreign currency quickly but implies an economic and energy cost. Or plan a closed chain of extractivism, development of materials, construction of cells and recycling of batteries.”
UniLib in Argentina is projected to be Latin America’s first lithium battery plant. Launched in 2021, it is a joint initiative of the National University of La Plata, the state-owned oil, gas and energy company YPF, and the main government agency for promoting scientific research, Conicet. But under the administration of President Javier Milei, laments Requejo, “YPF is no longer interested in the subject and there is no support from the universities,” which are experiencing serious funding problems.
once fully operational. This device repeatedly charges and discharges battery cells, recording data such as voltage and amperage (Image: Universidad Nacional de La Plata, CC BY)
In any case, Requejo questions whether the country should focus on lithium recycling. He says these are “highly complex processes, with elements that the region has in great abundance. Perhaps it would be better to invest in the development of more efficient and environmentally friendly extractive strategies.”
The pioneers
In Colombia, the company Altero has developed a technology to recover cobalt, lithium, nickel and copper, which are used to make batteries. Since its founding in 2018, Altero has already recycled more than 250 tonnes of batteries from mobile phones, computers, tablets, toys and electronic tools. Co-founder Miguel Alzate explains that the business model rests on a reliable supply of waste products, safe and inexpensive recycling processes, and finally, the commercialisation of recovered materials.
Alzate says Altero is the only company in Latin America to have developed a dry technology that does not require water or chemical inputs. It therefore does not risk causing water pollution or atmospheric emissions.
“We aim to expand our operational capacity in the region and establish strategic alliances to strengthen the supply chain of critical materials,” says Alzate. He adds that he recognises weaknesses in infrastructure for collecting and processing used batteries, and in research into new technologies.
It’s like a tsunami. The earthquake is the current need to make batteries for vehicles, but the wave of recycling will come in 10 years’ timeHernán Cáceres, director of Lithium I+D+i
The Centre for Research, Development and Innovation in Lithium Batteries (Lithium I+D+i) is a joint project in Chile between the Catholic University of the North and the mining company SQM. It is exploring areas such as new materials and battery cells, and sustainable recycling processes. “To enter into a recycling process, you have to have a significant amount of waste to process,” says the centre’s director, Hernán Cáceres. “In terms of electromobility, the penetration of electric cars today is very low, and batteries are lasting longer than expected.”
That means that, in some respects, there is still time. “It’s like a tsunami,” he says. “The earthquake is the current need to make batteries for vehicles, but the wave [of recycling] will come in 10 years’ time,” when electric cars have become widespread and the first batteries have fallen into disuse.
Also in Chile, the startup Relitia, which focusses on lithium battery recycling, plans to patent a technology for processing materials with a high degree of purity. But “lack of investment has limited our capacity to receive batteries, forcing us to operate in a reduced environment,” says CEO Nicole Briones. “This cycle is common among many regional startups: no investment, no plant; no plant, no production; no production, no permits; no permits, no sales; and no sales, no investment.”
One of the exceptions is Fortech. In 2023, it managed to grow its project to extract lithium, cobalt, nickel, copper and aluminium from batteries at an industrial scale. This was thanks to support from a German government agency that supports international sustainable development, GIZ. While the copper and aluminium are destined for re-use in electronics, the black mass is sold to buyers in the United States or Europe. In 2024, Fortech processed 200 tonnes of batteries, but the company has capacity for 1,500 tonnes (equivalent to 3,000 electric car batteries) according to project manager Francisco Pereira.
Transition costs and benefits
While recycling initiatives in Latin America are making slow progress, in 2024 the UN Secretary-General António Guterres observed “signs that the energy transition could reproduce and amplify the inequalities of the past, relegating developing countries to the bottom of value chains to watch others enrich themselves by exploiting their people and endangering their environment.”
To avoid this, a panel of experts organised by the UN proposed this transition be developed with human rights, equity and justice at the centre of all mineral value chains. The panel recommended designing a global framework for materials to be sourced and recycled according to best practices, and installing new recycling plants.
Elsewhere, the European research organisation SINTEF has proposed three measures to consolidate a circular economy for critical minerals: implement battery disassembly designs that facilitate the separation of materials; invest in recycling techniques that provide high-purity minerals at lower costs and energy requirements than mining; and extend collaboration in value chains throughout all stages of production, use and recycling.
If these targets are met, the authors hope “humanity’s need for energy and transport will be satisfied without the environmental costs that we have currently learned to live with.”
