India struggles to refine black mass for battery recycling

India’s effort to develop a homegrown battery recycling industry is stalling at a critical stage: the processing of black mass, the black powder that remains after used lithium-ion batteries are shredded. Without refining this material domestically, the country risks losing control over its clean energy supply chain at a time when China is tightening its hold on rare mineral exports and battery technology.

China already provided over 85% of India’s permanent magnet imports during fiscal years 2023 through 2025. With the government targeting 500 gigawatts of non-fossil fuel capacity by 2030—half from renewables—India must find alternatives. The solution lies in recovering critical minerals like lithium, cobalt, and nickel from discarded batteries and electronic waste.

To accelerate this, the government introduced a ₹1,500 crore incentive program last year. It offers 20% capital subsidies for recycling plants and operating incentives tied to sales, with support ranging from ₹25 crore for smaller firms to ₹50 crore for larger ones. However, funds are only available to facilities that extract minerals from black mass, not just those that produce it.

Black mass forms after spent batteries are shredded, containing lithium, cobalt, nickel, manganese, copper, and graphite. The graphite gives it a dark, sooty appearance, and it accounts for 40-50% of an EV battery’s weight. Yet India lacks the refining infrastructure to process all of it.

Exports loopholes undermine India’s black mass ban

A national seminar on critical minerals recycling, organized by the Ministry of Mines last week, highlighted the issue. Despite a temporary ban on black mass exports, some shredding companies continue sending it overseas by mislabeling shipments. Global restrictions on unprocessed mineral exports now require beneficiation, processing to extract value, before shipment, but India’s enforcement remains inconsistent.

India could recycle over 60,000 tonnes of lithium-ion batteries annually, generating around 30,000 tonnes of black mass. Yet most of this material leaves the country. Refiners in China and South Korea pay higher prices and process black mass more efficiently than Indian plants, leaving domestic recyclers with little reason to retain materials locally.

Companies such as Rubamin in Gujarat and Attero in Uttar Pradesh depend on black mass to refine minerals for new batteries. When local supplies fall short, they import it back, at raised costs. This creates a cycle where India exports something and later reimports refined products, weakening its energy security.

LFP batteries shrink value of domestic recycling efforts

The incentive scheme could help, but refiners still face lower prices and delayed payments from domestic buyers compared to global markets. The problem extends to India’s dominant battery type: Lithium Iron Phosphate (LFP) cells. Unlike Nickel Manganese Cobalt (NMC) batteries, which contain higher concentrations of cobalt and nickel, key metals in black mass, LFP batteries prioritize iron and phosphate, yielding lower recovery rates for lithium and cobalt.

Since India’s EV market favors LFP due to cost advantages, the black mass produced here is less valuable to refiners than NMC-derived powder. This economic gap reduces incentives for domestic recyclers to prioritize retaining black mass, as foreign buyers in China or South Korea remain willing to pay more for even low-grade NMC material. The result is a mismatch between India’s recycling output and global demand for high-value metals.

The current incentive program also targets battery-grade cathode production, a key step in completing the recycling process. Without domestic manufacturers capable of converting refined lithium, cobalt, and nickel into usable cathode materials, India’s recycled minerals could become stranded. Currently, no Indian company produces cathodes meeting EV battery standards, forcing reliance on imports even after extraction. Refiners like Rubamin and Attero, despite extracting valuable metals from black mass, must still source cathodes abroad, often at premium prices, to assemble new batteries. This bottleneck persists even as the government enforces higher recycled content mandates.