Amara Raja to start operations at battery recycling plant by November end

Amara Raja Energy and Mobility Ltd will start commercial operations at its greenfield lead acid battery recycling plant in Tamil Nadu by November end, as it looks to increase the proportion of recycled lead sources used in manufacturing. The recycling plant is expected to cater to 25-30% of the company’s overall raw material requirements eventually.

"The recycling plant that we have set up in Tamil Nadu is going to commence refining commercial operations during this month's end. We are going to start the battery breaking operations during the fourth quarter of this financial year," Delli Babu, CFO, Amara Raja, told investors in a post-earnings call.

The plant, set up under Amar Raja's subsidiary Amara Raja Circular Solutions at Cheyyar in Tamil Nadu, will have a total recycling capacity of 1.5 lakh metric tons per annum. The capacity will likely be increased in phases, with one lakh metric tons in the first phase.

The facility is equipped with advanced technologies such as a de-sulphurization system and oxy-fuel technology to significantly reduce CO2 emissions and minimize lead content in slag, ensuring high efficiency and environmental sustainability.

Battery recycling is considered essential for long-term cost efficiency and supply chain resilience in the face of growing raw material demand. It also helps reduce the environmental impact of battery waste.

Under its end-of-life product reclamation processes, Amara Raja has established a system that covers the entire lifecycle from procurement to processing, waste generation and recovery. Currently, recycled sources contribute to 83% of lead used in the company’s manufacturing.

The closed-loop system includes procuring old batteries from dealers, recycling materials via third-party recyclers, and using recovered lead for new battery production. Amara Raja Circular Solutions is actively involved in recycling lead by collecting scrap batteries and offering replacements to customers.

As per the government mandate, battery manufacturers are bound to meet minimum yearly recovery targets for batteries, which are 70% by 2024-25, 80% by 2025-26, and 90% by 2026-27 and so on. Amara Raja’s management noted that it has achieved the recovery targets.

The company also expects a reduction in material costs from the recycling plant. "As far as recycling is concerned, there could be a possibility if we can improve the recovery of lead by about 2-3%. It should reduce the material cost by about 1.5-2% at least," he said. The reduction is subject to the quantity extracted from the plant on an overall basis, he added.