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JX Nippon Mining & Metals has bought eCycle Solutions, Canada’s largest electronics recycling company, in a deal aimed at increasing its supply of critical minerals as demand grows with the transition to low-carbon energy and traditional resources get tougher to extract.

ECycle said its new Japanese ownership will accelerate its plans to expand its recycling operations businesses in Canada and establish a foothold in the United States. The company’s current facilities are located in British Columbia, Alberta, Ontario and Quebec. It also recycles plastic and has IT asset-disposition and refurbishment businesses.

JX Nippon mines and refines copper and other non-ferrous metals and supplies thin-film metals. It is buying eCycle for an undisclosed sum from Montreal-based Horizon Capital Holdings, a unit of the Martin Family Office.

JX is no stranger to the business, having been an eCycle customer for nearly a dozen years for smelting. The acquirer is facing short supplies of copper and other key metals as electric vehicles and other green technology move into the mainstream, said Michael Collins, eCycle’s chief executive officer.

Indeed, the International Energy Agency said in May that current geopolitical tensions, surging commodity prices and supply chain problems have shown the need to bolster alternatives for supplies of critical metals and minerals as demand grows for technology needed to meet net-zero emissions targets.

“As a result they need to go to market to look at how they can capture more recyclable material to extract copper from that,” Mr. Collins said in an interview. “So we’ve become that logical fit in that, obviously, copper content in electronics and electrical material is high and pure and plentiful. It’s just a matter of taking our footprint and our business model and extending it, not only in Canada, but taking it into the U.S.”

Not all of eCycle’s products will be used by JX, so eCycle will keep feeding the larger Canadian market for recycled metals, he said. In fact, the plan is to increase market share.

The company was established in 2005, beginning with a recycling facility in Airdrie, Alta. It now employs 300 people across the country.

This is the latest deal showing increasing financial interest in the circular economy, in which products and services are designed to eliminate waste and extend life cycles while minimizing carbon emissions and other ecological impacts.

Earlier this year, Montreal-based cleantech investor Cycle Capital and its French partner Demeter raised US$108-million to back companies and funds focused on the circular economy in an initiative that was spearheaded by the cosmetics giant L’Oréal SA. The fund is targeting packaging, bio-source product ingredients, replacements for microplastic beads, recycling as well as reducing carbon emissions in supply chains.

Today, most spent electronic gears end up in landfills and in other dumping places around the world and are not recycled, leaving a wealth of raw materials untapped. Metals in such waste, including copper, cobalt, nickel and palladium, can help meet demand from automakers and battery manufacturers as they look to achieve goals they’ve set for sustainability, Mr. Collins said.

“It’s a pretty good match. As things progress, we’ll see how that goes. But JX has conveyed to us that clearly cannot be met through raw material mining,” he said.

Origin Merchant Partners was financial adviser to Horizon and eCycle in the deal, and Davies Ward Phillips & Vineberg LLP was legal counsel.

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