Nth Cycle signs $1.1 billion lithium offtake deal with Trafigura

March 16 (Reuters) - Critical metals refining company Nth Cycle said on Monday it has signed a 10-year binding offtake agreement to supply nickel and lithium carbonate to commodities trader Trafigura for about $1.1 billion.

The deal, which was inked at the sidelines of the Indo-Pacific Energy Security Ministerial and Business Forum in Tokyo, underscores how governments across the world are ramping up efforts to reduce reliance on China for critical metals.

Under the agreement, Trafigura will buy 2,000 tonnes of contained nickel in mixed hydroxide precipitate and 1,500 tonnes of lithium carbonate refined from 12,000 tonnes of black mass.

Black mass is a shredded battery material that contains critical minerals such as lithium and is processed to recover ingredients for making new batteries. The material is increasingly seen as a key feedstock for Western battery supply chains.

Nth Cycle said the deal builds on the commercialization of its refining operations in Fairfield, Ohio, in 2024 and will support an expansion into South Carolina and the Netherlands, where it plans to install its modular Oyster refining system in existing facilities. Production in those geographies is scheduled to begin in 2028.

"There is an urgent need to build capacity for black mass refining and develop more diversified and robust supply chains, particularly in the U.S., where securing domestic critical mineral processing capabilities is increasingly central to energy and industrial policy," said Megan O'Connor, co-founder and CEO of Nth Cycle.

Nth Cycle said its Netherlands project would be backed by a 7.5 million euro ($8.62 million) grant awarded under the CRM Lion initiative.

($1 = 0.8699 euros)