Headwaters ARC, a planned battery recycling and critical minerals recovery campus in the Midwest, has entered final site-specific diligence on an existing 150,000-square-foot industrial building on more than 50 acres, developer Aqua Metals said Tuesday. A decision on whether to proceed with the site, along with its financing and development structure, is expected before the end of the current quarter.

Aqua Metals did not disclose the state, city, or exact address of the property, nor did it name the current owner or seller. The company described the location only as being within “the Midwest battery manufacturing corridor” and within driving distance of six unnamed lithium iron phosphate (LFP) gigafactory projects.

What the campus would do

Headwaters ARC will recycle scrap and manufacturing waste from LFP battery production — the chemistry increasingly powering electric vehicles, grid-scale energy storage, and AI data center backup power. The plant will run in two phases:

• Phase 1 would install commercially available preprocessing equipment to shred and sort battery scrap into black mass, aluminum fines, and copper fines. Aqua Metals has not yet selected an equipment vendor, saying it is evaluating multiple suppliers already operating at industrial scale and expects to name one “in the near term.”
• Phase 2 would add Aqua Metals’ proprietary AquaRefining process, extracting battery-grade lithium carbonate and iron phosphate from the black mass produced in Phase 1.

Aqua Metals said Phase 1 work would begin once it acquires the site, with both phases developing over “the following several quarters” — a timeline the company did not further quantify. Aqua Metals also said it eventually intends to add processing capability for nickel manganese cobalt (NMC) and other lithium-ion chemistries at the same campus, though it did not give a timeline for that expansion.

The AquaRefining process itself is not new: Aqua Metals says it has logged more than 5,000 cumulative operating hours on LFP feedstock at its Innovation Center and pilot plant in the Tahoe-Reno Industrial Center in Nevada, where it has produced lithium carbonate independently verified to battery-grade purity. Headwaters ARC would be the first site to run that process at commercial scale.

Why it matters

The Midwest site offers roughly seven times the building size and ten times the land area of Aqua Metals’ earlier Sierra ARC facility, a smaller recycling plant the company has been developing in Nevada. Locating near a cluster of LFP battery gigafactories would shorten the distance scrap material travels before processing, which the company says lowers logistics costs and improves project economics compared with a standalone greenfield build.

Aqua Metals cited third-party research projecting that LFP manufacturing scrap available for recycling will grow roughly 15-fold by 2030, which the company frames as the underlying demand case for building the plant now. The company said it deliberately held off on large-scale commercial deployment through 2024 and 2025 amid volatility in lithium and battery-materials pricing, and now views conditions as stable enough to move forward.

Additionally, the LFP recycling opportunity Aqua Metals is chasing sits downstream of a wave of new LFP production capacity coming online across the country, including LG Energy Solution’s $5.5 billion Queen Creek, Arizona complex, where a cylindrical EV battery line is on track to begin production in second half of 2026.

What’s not yet determined

Several questions remain open, per the company’s own disclosures:

• Aqua Metals has not disclosed a purchase price, lease terms, or total project cost.
• The company has not selected a preprocessing equipment vendor.
• Aqua Metals has not named any feedstock or offtake customers, though the company says it is holding active discussions with unspecified partners on battery pack and scrap supply, as well as offtake for aluminum, copper, and black mass output.
• Financing has not closed. Aqua Metals is evaluating a triple-net lease structure in which an outside real estate investor — not yet identified — would fund the land and building purchase and tenant improvements, reducing the company’s own capital outlay. It is separately discussing staged, milestone-based payment terms with equipment suppliers.
• Diligence itself is not finished; the company still needs to complete negotiations, secure financing, and obtain permitting and other approvals before acquiring the site.

The release cites “strong engagement from local and state economic development partners” as a site-selection factor but does not name any specific state, agency, or incentive package.

Next steps

Aqua Metals says it will announce its selected development path — including whether it proceeds with this specific property — within the current quarter. That announcement is expected to include more detail on financing structure and the chosen equipment partner.

Factsheet: Headwaters ARC

• Project: Headwaters ARC — Planned Midwest Battery Recycling and Critical Minerals Recovery Campus
• Developer: Aqua Metals, Inc. (NASDAQ: AQMS)
• Location: Unspecified site in the Midwest battery manufacturing corridor
• Facility: Existing 150,000-square-foot building on 50+ acres
• Size vs. Sierra ARC: 7x building footprint, 10x land area
• Site decision expected: This quarter
• Phase 1: LFP preprocessing (black mass, aluminum and copper fines); equipment vendor not yet selected
• Phase 2: AquaRefining integration for lithium carbonate and iron phosphate recovery
• Future scope: Planned expansion to NMC and other lithium-ion chemistries, no timeline given
• Financing: Triple-net lease structure under evaluation with Newmark advising; investor not yet named