Why is ASX lithium share Neometals soaring 20% today?

The European Union is crafting strict new battery recycling regulations.

ASX lithium share Neometals Ltd (ASX: NMT) is shooting higher today, up 19.8% in late afternoon trading.

The lithium stock closed yesterday trading for 48 cents a share. Shares are currently changing hands for 57.5 cents apiece.

Here's what's likely piquing investor interest in the ASX lithium share.

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What's sending the Neometals share price skywards?

Investors are bidding up the Neometals share price after the company released a promising update on the activities taking place with Primobius GmbH.

Primobius is a joint venture company owned 50:50 by Neometals and SMS group GmbH. The JV partners are working to commercialise the company's lithium-ion battery (LIB) recycling technology.

The ASX lithium share is flying higher on news that demonstration plant trialling of process improvements to the hydrometallurgical refining flowsheet have yielded "outstanding results".

Nickel, cobalt, and copper recoveries in the trials exceeded 95%. New lithium process recovery results are pending, with the previous process recovery coming in at around 83%.

Neometals JV completed three LIB recycling hub demonstration trials from December to March on EV battery modules that were shredded in the Hilchenbach LiB disposal facility.

The ASX lithium share aims to be the first to achieve the proposed recycling recovery requirements in the pending EU Battery Regulations.

Neometals managing director Chris Reed applauded the collaboration between SMS group and Neometals teams "to improve the process flowsheet to meet the ambitious new 2030 recovery targets of the EU Battery Regulations".

Reed added:

The goal post shift from 85% to 95% during the drafting of the legislation was challenging and we are nearly there. We look forward to seeing the benefits of our new lithium recovery process option and step changes in key recoveries across the process in the upcoming Hub ECS results.

He also thanked Primobius' collaboration partner, Mercedes-Benz.

Neometals said it plans to conduct future demonstration in the second half of 2023 for existing and new carmakers and cell makers in its business development pipeline.

How this ASX lithium share been tracking?

Despite the big boost in the Neometals share price today, the ASX lithium share remains down 28% in 2023.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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