60,000 sq. ft. lithium battery plant planned for Fernley
Time after time, new or relocating businesses coming to Northern Nevada usually cite some combination of a favorable business climate, location and logistics as the driving reasons for choosing the region.
All of those things were attractive to American Battery Technology Company Chairman and CEO Doug Cole, but it was a flat tire that sealed the deal.
The company, currently based in Incline Village, held a ceremony Aug. 27 to celebrate the pending purchase of a 12.5-acre plot of land adjacent to American Ready Mix off Logan Lane in Fernley, where it plans to build a 60,000-square-foot lithium-ion battery recycling facility.
Cole described the facility as a commercial pilot plant that will initially handle 20,000 tons of lithium-ion batteries.
Cole said finding a location for its first facility has been a three-year process. While driving to Hawthorne one evening about two and a half years ago, he got a flat tire near Walker Lake. The first car that came along stopped, and a couple in their mid-70s asked if they could help.
“That sold me on Nevada for the rest of my life,” Cole said. “That does not happen in other states. The whole attitude here is can do, let’s help.”
Once he settled on Nevada, Cole said he was looking for a location in a Qualified Opportunity Zone, and after looking all over the state, he found it in Fernley, with the added benefit of affordable land, proximity to Reno and easy access to Interstate 80 and the railroad.
“It’s the people, the town, the attitudes — it’s summed up with my getting a flat tire,” Cole said. “I spent two years talking to everybody in Fallon, Fernley, Silver Springs, Carson City, Minden, Gardnerville, and this is the best spot for the first plant.”
Project approvals still needed
While American Battery Technology Company — previously known as American Battery Metals Corporation, a brand change it announced in mid-August — touted the Aug. 27 event as a “groundbreaking ceremony,” the project itself still needs various approvals.
At the event, Project Manager Chuck Leber said the company hopes to choose a design-build contractor in the next few weeks.
“The first major challenge is getting the site plan approved,” Leber said. “We don’t have any permits yet. That’s a part of the process we’re going to be dealing with with our design-build contractor.”
Leber said American Battery was hoping to have a Request for Proposals sent by the first week of September to six prequalified contractors the company has chosen.
“I think in four to five weeks, we might be able to sit down and talk about a contract,” he said. “Getting permits is going to be the critical path.”
Fernley Mayor Roy Edgington said the company plans to meet with the city’s development team to ensure the property is zoned properly and to start the permitting process.
“They’re going to have to assure us that we’re not going to have health issue.” Edgington said.
According to a July 29 press release announcing that American Battery had entered into escrow on the 12.5-acre land deal, the company anticipates funding the project with a conventional 36-month construction financing of roughly $5.5 million, which includes: purchase cost of the building site, the initial 30,000-square-foot industrial building, and initial battery recycling equipment and utility infrastructure.
Once the plant is operational, the company anticipates the package will be refinanced with long-term project financing via a large-scale lending institution, which may include Small Business Administration loan guarantees.
American Battery expects to complete all due diligence on the property and complete the purchase by Sept. 15.
Plant could be operational next year
The Fernley plant will be built in two phases — a 30,000-square-foot building first, then another 30,000-square-foot building in the second phase — and will include laboratories for quality control and for doing experimentation, office space and warehouse space for finished goods.
Presuming the project and aforementioned permits are approved, completion of the first phase would create at least 50 new jobs, which could grow to over 200 new jobs within the next 24 months.
Once the contractor is hired and the permitting process is complete, the construction schedule is at the mercy of the COVID-19 pandemic, Leber said.
“I’m concerned about the labor situation with COVID,” Leber said. “I just came off a project in Arizona and the contractor there had a problem getting people on site. One of the questions I’m going to have for our potential contractors is what plans they have for mitigating those potential problems.”
If things go smoothly, Leber said the plant could be up and running in six months.
“But to be honest, I’m not sure how smoothly this is going to go, and we’re not going to know until we get into the middle of it,” he said.
Edgington, who is also the president of the Economic Development Authority of Western Nevada, said if the city’s permitting requirements and health concerns are met, the project represents the kind of economic diversification the state needs.
He cited recent sales tax figures showing that while Las Vegas is about 47 percent below normal, Northern Nevada is almost back to normal after the economic shutdown in mid-March.
“Unemployment is a lot less than in Las Vegas, and this is a reason,” Edgington said. “You have all these different sectors, all these different businesses, so if gaming takes a hit, you still have all these other jobs.
“If we didn’t learn anything out of all this COVID, what we should learn is that Nevada needs diversity. And I think this is right in line with what NNDA and EDAWN is pushing, and GOED.”
Of note, the company has plans for a second, larger facility at a to-be-determined location in Nevada, Cole said Aug. 27, which would employ 300 to 400 people and handle between 200,000 and 400,000 tons.
“That’s a year and a half or two years away,” Cole said. “Last year, 100,000 tons recycled; by the end of the year by 2030, there will be 30 million tons, and most of it’s getting thrown in the ground right now.”