Author: Gao Shan Source: Shanghai Securities News

"About 70% of the used batteries in the country have to go through from Xinxiang. Whatever you want, we can provide it, as long as the price is right!" Wang Hua (a pseudonym), the owner of a workshop in Muye District, Xinxiang City, Henan Province, told a Shanghai Securities News reporter who made an unannounced visit. According to him, there were thousands of small workshops engaged in battery dismantling at the peak (during the lithium carbonate price rise in 2022), and there are still hundreds of them, which can provide various products in the industry chain.

"Small workshops" refers to the kind of small factories that do not have the qualification of recycling and dismantling, they not only do not have the environmental assessment certificate, but also do not have the safety production license and hazardous waste business license, and some small factories are not even registered as enterprises. The reporter recently interviewed that such small workshops not only exist in Henan Xinxiang, Guangdong, Guangzhou, Shenzhen, Dongguan, Foshan and other places, there are also a large number of small workshops battery dismantling plant.

Black powder stacked in the warehouse of small workshops

In recent years, China's lithium battery industry has been soaring. As a key part of green recycling, the barbaric growth of the battery recycling industry has caused considerable headaches for all parties in the industry chain. "Most of the end-of-life batteries flow to small workshops and in the regulatory blind spot of the secondary use market, formal recycling enterprises basically difficult to receive end-of-life batteries, a large number of high-quality recycling capacity in an idle state." Ningde Times Chairman Zeng Yuqun previously said so.

Reporter investigation found that, compared with the regular army, small workshops have low cost, group combat, low threshold and other "competitive advantage", but there are many hidden dangers of environmental protection, safety, etc., resulting in the field of waste battery recycling "bad money expel good money" of the abnormal ecological long-term existence. Urgent need to rectify and reshape.

Industry insiders believe that with the recent sharp fluctuations in the price of lithium carbonate, the ecology of the waste battery recycling industry is undergoing dramatic changes, should seize this "window" to accelerate the rectification, and promote the sustainable and healthy development of the industry.

The hidden small workshop "black powder" business

Where do all the used batteries go?

"Xinxiang City, Henan Province, Makino District, the new seven streets, latitude seven roads around the 10-kilometer range, a number of villages have a large number of small workshop 'black powder' manufacturing enterprises." At the end of March this year, after many days of searching, the reporter suddenly received a text message. There was no more information, and the phone call back was not answered, and the person who provided the tip seemed cautious.

From Zhengzhou, about an hour's drive to Xinxiang City, Makino District. The country road, the roadside rape flowers are blooming, there are occasional electric cars or tricycles passing, foreigners and foreign cars look particularly solid.

To buy "black powder" (waste lithium-ion batteries by dismantling, crushing, sieving, pyrolysis, sorting and other processes to get the black powder containing nickel, cobalt, manganese, copper, aluminum and lithium and other metals and toner), the reporter, as a trader, randomly knocked on the door of a villager. After explaining his intention, the other party immediately pointed out the path for the reporter - a blue shed a few hundred meters away, where there is a small factory.

From the roadside, this small workshop outside covered with ordinary large tin shed, the door is very wide, or to facilitate vehicle access. But if someone does not point the way, it is difficult for outsiders to see that this is a small factory. The factory door also left a small door, knock on the door and enter, a glance to see a few scrap battery packs scattered in the hall.

"I do not play powder, now lithium carbonate prices fall every day, this market, business is not good." The owner, Mr. Luo, is very cautious. He told reporters that he mainly does the secondary use of batteries.

In another small workshop owner Luo Cheng (a pseudonym), the reporter met with Wang Hua, a local "battery business is doing great" in Xinxiang boss. From a small door in the street, through an alley, open an iron door, and then through a courtyard, and then open a door, is Wang Hua's warehouse. The reporter saw that the warehouse is stacked with dozens of large woven bags, which is filled with "black powder".

According to Wang Hua, he has another powder factory, recently did not start, the inventory on hand is not a lot, if needed, he can quickly help organize the source.

Reporter investigation found that the vast majority of small workshops are not listed, with a strong concealment. A very small number of enterprises hanging "a certain battery raw materials factory" sign. The bosses will declare in advance before the transaction "can not be invoiced".

Dismantling and reuse of multiple risks

"You are here to beat the powder, not afraid of accidents? How about the battery explosion?" Leaving Wang Hua's warehouse, the reporter and Luo Cheng continued to chat all the way.

"Just be careful. There are also accidents, before a factory blew up, people are fine, a warehouse of batteries are gone." Luo Cheng said.

Lithium battery pack itself has high energy, may occur short circuit, leakage and other various safety issues, which in turn may catch fire or explode. The reporter learned from an unannounced visit that the production environment and equipment of small workshops are relatively rudimentary, the operation is often less standardized, dismantling the battery there is an explosion, fire and other safety risks.

Not only dismantling, lithium batteries themselves are dangerous goods, storage, transportation are also facing greater risks, resulting in fire accidents are not uncommon. More worrying is the problem of environmental pollution, such as improper dismantling of used lithium-ion batteries, may cause nickel, cobalt, manganese and other heavy metal ion pollution, fluorine pollution, as well as organic pollution.

"We mainly do the first half (of disassembly) here, not the wet (chemical decomposition), and the environmental issues are pretty good." Luo Cheng is reluctant to talk much about the topic. Another small workshop owner in Xinxiang also said that the local management of this piece (environmental protection) is not too strict.

The waste of resources is also a major problem, part of the regular recycling and dismantling enterprises can also be recycled materials, small workshops do not have the ability to deal with only as garbage disposal, which is not conducive to recycling.

However, Luo Cheng insisted that he and his peers have sold all kinds of materials after sorting, and the use of resources has been done to the extreme. Wang Hua revealed to the reporter, "black powder" is mainly sold to several well-known domestic recycling enterprises, such as a leading enterprise in Jiangxi, and he once had a deeper cooperation.

This coincides with what the reporter learned. It is understood that small workshops can not complete the recycling process, mainly for pre-treatment, extraction of materials or mainly by formal enterprises for follow-up use.

Compared with the risks of safety and environmental protection, another risk may directly harm the interests of consumers.

In September 2022, the police in Zhangjiakou, Hebei Province, made public a case of selling counterfeit registered trademarks, in which the local police seized more than 150,000 counterfeit "Nanfu" batteries at the scene of the dismantled battery counterfeiting site, involving a value of more than 500,000 yuan. According to the investigation, the production site of counterfeit batteries was located in Xinxiang, Henan Province, and one counterfeit battery production site and one counterfeit battery storage warehouse were terminated in Xinxiang, and seven suspects were arrested for manufacturing and selling counterfeit "Nanfu" batteries one after another.

It is understood that some of the so-called secondary use of small workshops, is the battery pack is disassembled, according to the shape of the selection or simple detection, and then replace a package sold, downstream including children's toy manufacturers, small electrical manufacturers, such as some handheld electric fan batteries, often is the ladder use.

"What kind of batteries you need, we have them all." Before leaving, Luo Cheng said to reporters.

"The higher the price, the better." The regular army can not do small workshops

Xinxiang, why can gather so many small battery dismantling workshops? And how do they get used batteries?

"The main thing is the price, you pay a high price, of course, others sell to you." According to a local person engaged in the dismantling of used batteries, after years of development, some small bosses in Xinxiang established a number of recycling channels, and we are very "group", in grabbing the source of goods have advantages. He said, for example, a certain Xinxiang boss to find a batch of sources, may be tens of millions of yuan of funds, a person to take down a lot of effort, we put together, soon to be finalized.

In fact, the battery industry in Xinxiang has a long history. 1950, the first battery enterprise in Henan Province was established in Xinxiang. 1956, China's first secondary battery production enterprise state-owned 755th factory was also built in Xinxiang. It is one of the most complete battery production bases in China, and was one of the top ten battery export bases in China, known as the "Whampoa Military Academy of China's power industry".

"His grandfather is a battery, his father is also a battery, to his generation, but also rely on the battery." Chatting, a local villager introduced his partner in this way.

Also do waste battery recycling dismantling and reuse, the regular enterprise reason why can not do small workshops?

"From the recycling end, we really don't have the price they dare to offer." The person in charge of a dismantling white-listed enterprises in South China told reporters that, compared with formal enterprises, small workshops have almost no environmental protection input, and do not have to pay taxes, and family workshops have also significantly reduced labor costs.

It is understood that due to the lack of unified standards for lithium batteries, the structure of different battery packs of different manufacturers is not quite the same, although a number of leading enterprises have made technical breakthroughs in intelligent dismantling, but the comprehensive advantage is not obvious, manual dismantling is still the main mode of operation.

At the same time, small workshops have almost no investment in environmental protection, and the investment in fixed assets and production costs are very low. This has also led to the proliferation of small workshops, some of which even buy a crusher at home and complete the processing in their own yards.

The dismantling of used batteries, not only in Henan Xinxiang gathered. Reporters interviewed that Guangdong's Guangzhou, Shenzhen, Dongguan, Foshan and other places, there are also a large number of "workshop" battery dismantling