An Atlanta-area startup that bills itself as one of America's first large-scale lithium battery recyclers said Tuesday it has secured at least $5.3 million toward a planned $15 million Series A round and acquired a Georgia refining complex out of bankruptcy, positioning itself to capitalize on new federal rules that now mandate critical minerals remain on U.S. soil.
R3 Lithium paid $3 million in cash and assumed liabilities to buy the 154,000-square-foot Covington facility this summer, according to Securities and Exchange Commission filings. The plant was built by Ascend Elements, a battery recycling venture that filed for Chapter 11 protection in April after spending roughly $150 million on construction. The site had been producing commercial-scale lithium carbonate from recycled electric-vehicle batteries before Ascend's collapse left the operation in limbo.
Now R3 is betting it can succeed where Ascend stumbled. The company's pitch centers on turning end-of-life EV batteries and manufacturing scrap into battery-grade lithium carbonate without the overseas detour that most of the industry still requires. Batteries arrive at the Covington plant and get shredded on-site into a powder known in the trade as "black mass," then run through calciner-based crystallization and water-based precipitation to extract lithium. Byproducts including nickel, cobalt, manganese, and graphite are sold separately as concentrated metal oxides.
The plant can produce 2,500 tons of lithium carbonate annually on its existing line, with R3 saying it has space for a second production train of equal capacity, according to a September 10 announcement. Shredding capacity tops out at 30,000 metric tons per year.
Linh Austin, R3's chief executive, previously held roles at Ascend Elements as well as serving as regional CEO for the Middle East and North Africa at McDermott International and holding senior positions at BP and ARCO. Eric Gratz, R3's chief technology officer, co-founded Ascend and holds dozens of patents on lithium-ion recycling; he also serves on the Department of Energy's Li-Bridge Technology Committee, an advisory body focused on domestic battery supply chains.
When asked about inheriting Ascend's operation, Austin told the Atlanta Journal-Constitution the bankruptcy was "kind of a distant memory… a very different chapter." Perhaps, though the personnel overlap suggests continuity as much as reinvention.
The planned $15 million Series A involves Integral GlobalTech Partners, TDK Ventures, and Axial Partners. An SEC filing from mid-July showed R3 had sold $5.3 million to seven investors as of early July; the company said the round closed two months later.
Timing has worked in R3's favor. On August 6, the Commerce Department issued a directive under the Defense Production Act requiring U.S. companies to allocate all monthly black mass sales to domestic buyers unless granted an exception. The rule took effect August 27 and runs for one year, effectively kneecapping the business model that long sent recycled battery material to China and South Korea for processing.
"The U.S. has spent years discussing critical mineral independence while the vast majority of lithium processing has remained overseas," Austin said in a statement.
R3 says it has signed roughly $1 billion in offtake agreements, including what the company describes as a deal with commodities trader Trafigura. Tim Wood-Dow, a battery metals trader at Trafigura, said in R3's announcement that "battery manufacturers… are increasingly seeking reliable sources of domestic lithium." Whether those agreements translate into revenue depends on production ramp and pricing, neither of which R3 disclosed.
The company expects to reach continuous commercial production by late summer of next year and plans to hire 80 to 100 employees during the ramp, according to the Journal-Constitution. Austin told the paper R3 envisions multiple U.S. sites: "We're a large-scale refiner, and we want to… do this in multiple locations across the U.S."
Covington sits about 40 miles east of Atlanta in a corridor that has drawn EV and battery investment. The Department of Energy selected Princeton NuEnergy in August for a $50 million grant to build a closed-loop cathode facility in nearby Commerce, Georgia.
Competition in domestic battery recycling is heating up, though the sector remains small. Redwood Materials, founded by former Tesla CTO JB Straubel, claims it processes roughly 90 percent of all lithium-ion batteries recycled in North America and began critical materials recovery in South Carolina late last year. Nth Cycle received a DOE grant worth up to $100 million in August to build a South Carolina refining facility targeting 24,000 tons per year of black mass capacity within a few years, according to the Boston Globe. Blue Whale Materials is scaling black mass production in Bartlesville, Oklahoma, with more than $55 million in DOE funding announced in January.
Overseas, Europe has moved faster. ToZero launched a demonstration plant in Bavaria and delivered its first recycled lithium to customers early last year. Cylib acquired a Bavarian facility with up to 10,000 tons per year of end-of-life battery capacity in July.
The International Energy Agency reported in May that China still hosts more than 85 percent of global recycling capacity. BloombergNEF data showed strong energy storage additions globally last year; GlobalData projected in July that global battery energy storage capacity will expand sixfold by the end of the decade, a 42 percent compound annual growth rate.
Court documents show R3 was designated the successful bidder for the Covington assets on June 19. No competing bids emerged, and the sale closed in July for a fraction of what Ascend spent building the facility. Whether that bargain translates into a viable business remains an open question, but Gratz framed the opportunity in straightforward terms: "Every battery already in service in this country is a lithium deposit."
That's the bet. The proof will come when R3 starts shipping product at scale.
