How climate activism has sneaked into our daily lives… and is here to stay!

Interview with Kurt Vandeputte, Sr. Vice President of Battery Recycling Solutions at Umicore and keynote speaker at Asset Performance 2023

What half a century ago was still classified as “environmental fundamentalism” or “catastrophising” in the Western world, has entered into mainstream societal trends nowadays. Smart use of information, innovation and available energy is the basis for the current digital and energy transition. This approach has entered our private and professional lives. Moreover, global geopolitical tension and the Covid health crisis have even accelerated the impact on all of us. Asset Performance 2023 welcomes Kurt Vandeputte, Senior Vice President of Battery Recycling Solutions at the Belgian company Umicore, to talk about these trends and principles at Umicore.

Kurt, how did you start your career?

I’m actually a chemist by education. I studied at the University of Ghent and graduated with a PhD in chemistry. I’ve always been a curious scientist. I started my professional career at Umicore in 1997 in several operational roles. But gradually my business acumen sent me in different directions. That’s why I started working in the battery material space in 2002. I really saw the Umicore battery materials activity grow from a small project to a division with close to 2,000 people when I left in 2019.

What kind of company is Umicore and how has it been transforming in recent years?

On the one hand, Umicore is quite old and traditional. On the other hand, it’s also a very modern and transformative company to work for. I think you can best describe us as a circular materials and recycling company. All of our materials are based on metals. We work specifically with special metals like nickel, cobalt, lithium and manganese. We also treat precious metals, for example silver, gold, platinum and rhodium.

At the moment, our focus is on materials for the green and digital transition: the so-called ‘Twin Transition’. Most of our products go into clean mobility solutions. For instance, we’re currently making and developing the chemistry behind an internal combustion engine which basically cleans up the exhaust gases of an engine. Typically, precious metals like platinum, palladium and rhodium are used to catalyse the gas clean-up of an internal combustion engine.

A second important example for green mobility is of course our battery materials. Umicore is making the cathode material that goes into a lithium-ion rechargeable battery for electric vehicles. The cathode material is actually the key component of the battery. It’s responsible for performance, that is, the distance you can drive with one battery charge. It also accounts for the majority of the cost because the metals have quite a high price tag. And then, thirdly, this material is also responsible for the ESG performance of electrification. The whole process is quite energy intensive: from mining, to refinery and the production of the cathode material. As such, we are essentially a key contributor to the embedded CO2 of these materials.

Umicore also produces quite a few materials for the communication tools that we use every day. These materials go into semiconductors, but also into touchscreens, smartphones, connectors, sockets, and charging cables. In these products, you can typically find some of our coated materials. At the end of these applications’ life cycle, we take the devices or the components back to recycle them and extract the metals. We do this for spent automotive catalysts, chemical catalysts, plating material, end-of-life batteries… We extract metals with very high efficiency and bring them back into the supply chain.

In your keynote, you’re going to talk about how climate activism has sneaked into our professional and daily lives and is here to stay. There are big changes in our society. How have they affected Umicore?

Well, for Umicore, environmental impacts in the world are crucial and are driving our business. Most of our business is actually driven by regulations. One important example is clean air. Wherever you live, everybody wants to breathe clean air. Our automotive catalysts give you exactly that. We essentially clean up the hazardous components coming out of an engine to make sure that they are reduced as much as possible before they are emitted into the atmosphere.

Another important change is resource scarcity. Many, if not most people, are now very much aware that with 8 billion people living on this big blue globe, we need to be extremely careful with the resources that we use, be they food, energy, water or mineral resources to make materials. Resources are really driving our development and the innovation in our society.

A third example, which I also see as crucial for our business, is global urbanisation. More and more people are living in urbanised areas, which means that mobility is changing, the use of assets is changing and housing is different…

The last example is dematerialisation, which is certainly a trend in Western Europe. I have the feeling that people are starting to realise that we should do more with less. We should use our resources and our materials more intelligently. This also means de-functionalisation. Lots of devices or services are promoted with a lot of functionalities which probably 90% of people never use or are not capable of using.

How do you see these mega trends impacting investment decisions at Umicore?

These trends go to the heart of Umicore, so they impact on us tremendously. Of course, they are also linked to the energy transition. We’re very active in electrification. For our battery materials, this means that our company most likely will double or triple in size in the coming 7 to 10 years. Last year, we launched our new strategy called Rise 2030. We set the business targets and defined the business trajectory underpinning that growth. We looked at the key impacts defining our business. And then, last but not least, we defined our ESG targets, going along with that growth. Reviewing your business growth is not enough, you also need to look at how you can achieve that growth in a sustainable way.

To give you one example, we plan to invest billions in assets and new plants across the world. There’s a strong commitment at group level that our investments have to be carbon neutral from the start. So, we’re going to decarbonise our activities, but all future growth has got to be carbon neutral. That way, in five years’ time, we won’t be confronted with a problem that we created ourselves. We’re really convinced that sustainable growth is the way to go for us.

And this has also been applied to the giga factories that you have been building in Poland and South Korea?

Yes, absolutely. Our battery material business started in Asia, just like the general lithium-ion battery business, which emerged in Japan 30 to 35 years ago and expanded to South Korea and China. In just the last five years, we’ve been seeing a shift towards the West. That’s thanks to the electrical automotive market taking off. And it will become many times bigger than the market for portable electronics. As the batteries get bigger, we need a greater volume of materials going inside these batteries. So, we decided quite early on to invest strategically in the West to be one of the frontrunners in Europe. Four years ago, we decided to build a plant in Poland for cathode materials. For a company like ours, it’s important to be close to your market. And at that moment in time for us, it was already pretty clear that the big battery factories would tend to be concentrated more in the centre of Europe, trending a little bit towards the former Eastern part of Europe. You can actually see this happening now. There are quite a few battery factories located in Germany, Poland, and Hungary. And of course, we have one in France as well.

But Poland was a strategic choice. It’s a central location, a day’s drive from all the main battery plants in Europe. In Poland we also got the guarantee of using green electricity. On the road towards our investment, we entered into strategic discussions with the government in Poland, because they wanted to transform their electricity and distribution strategy as well. They saw this investment as a means to change the regulation and to promote their transition from a coal-powered country to more renewable energy. From the outset, we were in contact with energy suppliers and electricity producers in wind and solar, so we could supply our facility with 100% renewable electricity from day one.

Butof course, it doesn’t stop in Poland. We will expand further in Europe. We have a big intermediate material production plant in Finland, which is also well known for its efforts for renewable or at least low-carbon-intensity energy.

We’re investing in battery materials in all the current – and future – key battery regions in the world. Our next step is now an investment in North America – Canada – which is one of the most well-known countries for green electricity. They have hydroelectricity available in abundance. The Province of Quebec runs on 100% hydropower and Ontario is close to 75% hydropower, topped up with nuclear power. Wind electricity is also gaining a lot of traction.

How do the ESG goals impact on the way that Umicore operates facilities? If you look inside a factory, new or existing, what kind of actions is Umicore taking there?

Battery material production is highly energy intensive. And energy for us means electricity. To produce battery materials, you need a solid reaction at a high temperature for quite a while. A product enters a furnace at 1,000 degrees Celsius and needs to stay in that furnace for hours, because the chemical reactions need to happen in a controlled way.

Our priority is energy efficiency. It’s all about how we can reduce our energy consumption per unit of material produced. This starts with the asset itself, like the design of the furnace. We are really co-designing these furnaces from scratch with the supplier with the aim of maximal energy efficiency. We have literally changed the design of the furnace entry completely in order to make sure that energy is not wasted at this point. The next thing you need, is a container. We changed the composition of the container a few times to reduce the thermal energy necessary, because that container also undergoes the same temperature of our furnace. And in the end, it doesn’t contribute to making products. We really design every element with the aim of reducing the amount of energy that doesn’t go into our product. If you ask an operational manager what keeps them awake at night, they’ll probably say energy efficiency!

An important step that we have taken over the years is to reuse energy in one way or another. For example, we need a renewal of the gas atmosphere in the furnace. That means we have to evacuate gas. But we want to recuperate the energy from the gas and re-inject it into the furnace. The current state-of-the-art furnaces do not compare in any way to the furnaces that we used 15 years ago. This is really crucial from an ESG perspective.

But in most cases, what is good for the environment is usually also good for your wallet. Energy is one thing, but I would also like to stress the importance of water usage. The first part of a production process is not at high temperature, it’s hydrometallurgical. We work with assets, like typical chemical companies do, and reactor vessels. The pressure on the absolute amount of water that we’re using, is really high. There are so many regions in the world where water is becoming a scarce, very precious and sacred resource. So, we have to make sure that we use the right quality of water, at the right moment in time, and limit our water usage as much as we can. Enormous efforts go into that resource as well.

And what about the step after design: asset operations, maintenance and performance? What are the points for attention here? How do you ensure this high level of performance?

Luckily, we are a very diverse company. Next to battery materials, we also recycle precious metals, which involves a completely different asset type that we operate. It leans more towards the heavy metallurgical industry, whereas our battery materials are a more “pharmaceutical” part of the company. Naturally, we work with completely different requirements and different types of plants.

Battery materials are a very new industry. Most of our plants are very modern: they are five to eight years old, at most. When we modelled the plants, we made sure a lot was automated and we put sensors everywhere. Asset performance in these plants is all about energy efficiency. Some of our products are, by nature, hazardous, which adds another layer of complexity. For example, dust control is extremely difficult. Most of our plants work in an under-pressure situation to ensure that whatever happens in the plant is contained in the plant. But then, we obviously have to guarantee that all the product transfers are done in a proper way. Umicore excels in terms of dust performance, which is important, because not creating dust means reaching a very good ESG performance, complying with the Occupational Health Limit, and protecting employees. What is good for your people, is also good for your wallet: every kilogram of dust means a kilogram of value lost.

I’d also like to come back to energy management. Let me take the example of battery recycling, for which we use a high temperature process. That is a deliberate choice because it avoids us handling these batteries and exposing workers to the dangerous chemicals inside the battery. The battery itself is a fully closed device, but the aluminium and the steel can are not dangerous. We basically smelt these batteries directly. The battery is a container full of chemical energy, so if you start to smelt that, you have lots of exothermic reactions. Now, how do we get rid of this excess energy? What do we do with it? That’s why we’re designing our new facilities to become green electricity producers. We use the steam from the recycling process for other processes. We’re actually going to “turbine-ise” some of the scheme to produce our own green electricity. In short, we’re not only extracting the metals, we’re also going to do it in a way that has a very low impact on the environment. And on top of that we’re going to become a green electricity producer ourselves.

That’s interesting and inspiring! To provide this performance, maintenance activities are also important.

Yes, of course.In the precious metal recycling and refinery industry, it’s very important that things are predictable. So, in other words, when a supplier gives you a metal in consignment, you really have to know from the moment you receive the material whether you’re going to give back the pure gold or the pure platinum. Because that is your commercial offer: you have to finance these metals, and the customer relies on the fact that on a given day, they will get the metal back, and they can use it in their process again. They don’t want to go out into the open market and buy a little bit of gold for 10 days because you’re shipping your product late. So, predictability is everything.

If predictability in the business is everything, the assets you are operating need to be predictable too. That’s why we use sensors in our operations. Periodically, we need to rebrick and retool our smelter, which is a brick box with a metal container around it. During smelting, you’re actually slowly “eating” the bricks. And after a while, you have to stop the smelter, empty it, and then rebrick that. Typically, it takes a couple of weeks to do so. For us, this is the most important moment of the year, because that’s when everything happens. The maintenance schedule needs to be followed minute by minute, hour by hour. And things need to be done extremely well to avoid you having unforeseen stoppages in the year. If we have an unforeseen, really fundamental stoppage of the furnace, that means that the whole plant is affected, because every kilogram of scrap enters our plant through the furnace. The furnace is the first step. So, maintenance is crucial. We have to make sure that our predictions are met. And that any structural maintenance is executed as meticulously as planned.

Without any doubt, there’s a lot of preparation in these shutdowns. I can imagine that it’s always a stressful moment to get everything ready in time.

Oh, yes. When the shutdown is coming, you can usually feel a shift in people’s mindset. Things get a bit more stressful or heated on the shop floor. Of course, when you start maintenance, there are always certain things you suddenly see when you open a piece of equipment or when you install another piece. There are always moments where we go: “Oops, I didn’t foresee that”. Those are very stressful moments.

Without any doubt, you need a resilient organisation to cope with the challenges and the time pressure.

Yes, and of course, you have to rely on your own organisation. This kind of plant maintenance is executed with partners and experts. Just like any other industrial company, we run the plant, but in terms of asset maintenance, you need an expert. And we rely on a very extensive network to get it done on time and within scope.

Do you have any practical advice that we can share with other plant managers regarding the future and how you see the future of manufacturing?

My first piece of advice would be: make sure that assets or operations develop in line with your people. Because the most fantastic assets will never run without people. I think it’s important that whatever upgrade or development you make, it has to go hand-in-hand with listening to your crew, making sure that they understand what you are doing, ascertaining what the targets are, and keeping on stressing the crucial role of the human brain in planning, managing and forecasting. I don’t expect Chat GPT to tell me how we have to overhaul a plant and how we have to design a completely new tool. This creativity comes from teams of people. Not necessarily from a single human brain, but from teamwork.

Secondly, I think people focus too often and too much on doing things that are may not directly lead to productivity. They focus on cost, but sometimes people forget the indirect benefit. Of course, the most visible part of an operational function is what you produce and what it costs. But business is more than that. A key success factor could be your product’s performance stability. The interaction in your whole organisation is crucial. Everybody is responsible for one part of a large, important train. We should not forget that.

And lastly, don’t forget to look outside your plant. It’s very dangerous to be drawn into operational priorities. There’s always something happening on your plant, in an asset, always; every moment of the day, every day of the year. But don’t forget to look outside these operational tasks and stay connected with your people and stakeholders.