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Stelco to Enter the Rapidly Growing Electric Vehicle Battery Recycling Market Through

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Transaction highlights include:

  • Primobius GmbH is a 50:50 joint-venture of leading steelmaking equipment manufacturer SMS group GmbH and Neometals Ltd (ASX: NMT), an Australian specialty metals company

  • Stelco plans to secure end-of-life electric vehicles to source scrap steel feedstocks and recycle lithium-ion batteries in a proposed 20,000-net ton per annum integrated operation at Lake Erie Works

  • Will produce up to 18,400 net tons per annum of nickel, manganese and cobalt sulphates, lithium hydroxide and carbonate, and up to 40,000 net tons of steel scrap

  • Internally generated scrap will reach over 25% of Stelco’s steel scrap requirements

  • Primobius will issue a license to Stelco and hold an option to acquire 25%–50% of the venture

  • Initial operations targeted for 2023

  • Technology currently commissioned at 4,000-net ton per annum facility in Hilchenbach, Germany

HAMILTON, ON, Dec. 31, 2021 /CNW/ – Stelco Holdings Inc. (TSX: STLC) (“Stelco” or the “Company“) announced today that it has executed binding licensing and option agreements with Primobius GmbH (“Primobius“) to commercialize Primobius’s proprietary advanced electric vehicle battery recycling and processing technologies in North America. The licensing agreement will enable Stelco to advance commercial lithium-ion battery feedstock sourcing agreements and commence engineering and approvals processes. The option agreement grants Primobius the right to acquire between 25% and 50% equity in Stelco’s wholly-owned subsidiary performing these activities. If not exercised by Primobius, Stelco will have the exclusive rights to utilize Primobius’s proprietary technology in Canada, the United States and Mexico to recycle lithium-ion batteries removed from end-of-life electric vehicles, and Primobius will be entitled to a gross revenue royalty.

Stelco Inc. Logo (CNW Group/Stelco)

Stelco Inc. Logo (CNW Group/Stelco)

The proposed 20,000-net ton per annum integrated shredding and hydrometallurgical refinery at Lake Erie Works will enable Stelco to become a leading lithium-ion battery recycler in North America, producing up to 18,400 net tons per annum of nickel, manganese and cobalt sulphates, and lithium hydroxide and carbonate, and is also expected to generate up to 40,000 net tons per annum of scrap steel that will be recycled into Stelco’s steelmaking operations. The plant will help meet the need for multiple large recycling facilities to manage significant anticipated volumes from end-of-life electric vehicle batteries originating from the world’s fastest growing cell-making region and provide Stelco with the opportunity to build additional processing facilities across North America. Capital costs of the plant will ultimately be based on detailed engineering studies expected to be completed in mid-2022 and are not expected to be material for the initial planning and development stages.

Stelco Executive Chairman and Chief Executive Officer, Alan Kestenbaum said: “Stelco is thrilled to partner with Primobius. After an extensive search for best-in-class technologies worldwide, including a detailed review of Primobius’s newly commissioned and operational demonstration plant in Hilchenbach, Germany on the premises of leading engineering firm SMS, Stelco has reached an agreement that will enable Stelco to create a closed loop system of auto recycling and provision of green steel and battery metals back to its automotive OEM customers. With this novel approach, Stelco is uniquely positioned to provide the highest quality automotive steels available in North America as well as a greater value proposition to its customers.” Kestenbaum continued, “By providing this service, Stelco will be able to recycle end-of-life electric vehicles, convert them into green steel and recover from their batteries high purity metals such as lithium, nickel, cobalt and manganese. The synergies obtained by joining the leading engineering company in the world with the leading battery metals technology company and with our state-of-the-art steelmaking capabilities position Stelco as the best-in-class partner to automotive OEMs, particularly those pursuing electric vehicle strategies.”

About Stelco

Stelco is a low cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America. Stelco produces flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled sheet products, as well as pig iron and metallurgical coke. With first-rate gauge, crown, and shape control, as well as uniform through-coil mechanical properties, our steel products are supplied to customers in the construction, automotive, energy, appliance, and pipe and tube industries across Canada and the United States as well as to a variety of steel service centres, which are distributors of steel products. At Stelco, we understand the importance of our business reflecting the communities we serve and are committed to diversity and inclusion as a core part of our workplace culture, in part, through active participation in the BlackNorth Initiative.

Forward-Looking Information

This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws. Forward-looking information may relate to our future outlook and anticipated events or results and may include information regarding our financial position, business strategy, growth strategy, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “does not anticipate”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. These statements include, without limitation, statements regarding Stelco’s ability to become a leading lithium-ion battery recycler in North America; expectations that Stelco will be able to meet the need for large recycling facilities to manage significant anticipated volumes from end-of-life electric vehicle batteries; that synergies will be obtained by joining with Primobius and its affiliates; expectations regarding production capacity and scrap steel quantities generated from the production plant; expectations regarding the initial capital costs expectations that Stelco will be positioned to be the best-in-class to partner with automotive OEMs pursing electric vehicle strategies.

Undue reliance should not be placed on forward-looking information. The forward-looking information in this press release is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Certain assumptions in respect of: the utilization of and access to our production capacity; capital expenditures associated with accessing such production capacity; the impact of COVID-19 on our business and the broader market in which we operate; the market’s ability to recover from COVID-19; upgrades to our facilities and equipment; our research and development activities associated with advanced steel grades; our ability to source raw materials and other inputs; our ability to supply to new customers and markets; our ability to effectively manage costs; our ability to attract and retain key personnel and skilled labour; our ability to obtain and maintain existing financing on acceptable terms; currency exchange and interest rates; the impact of competition; changes in laws, rules, and regulations, including international trade regulations; and growth in steel markets and industry trends are material factors made in preparing the forward-looking information and management’s expectations contained in this press release.

Key Assumptions Underlying the Shredding and Hydrometallurgical Refinery Facility Production Estimates

The estimated production volumes associated with the shredding and hydrometallurgical refinery facility proposed for Lake Erie Works included in this press release are based on a number of assumptions, including, but not limited to, the following material assumptions: expectations that third party contractors and suppliers will deliver, construct and perform in accordance with agreed upon design plans and plant engineering reports; expectations Stelco will be able to procure and obtain sufficient quantities and quality of end-of-life vehicles to fully-utilize the facility’s design capacity; our ability to obtain any applicable regulatory approvals and permits required in connection with operating the facility; expectations that, upon completion, the facility will produce in accordance with anticipated design capacity; expectations that the market for electric vehicles and steel products does…



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