Michelin is launching construction on its first mining tyre recycling plant in collaboration with Enviro, a Swedish company that has developed a patented technology to recover carbon black, oil, steel and gas from end-of-life tyres. Based in Chile’s Antofagasta region, the plant will be able to recycle 30,000 t of earthmover tyres a year, or nearly 60% of such tyres scrapped every year nationwide.
Work will begin in 2021, with production scheduled to get underway in 2023. More than $30 million will be invested in building Michelin’s first new-generation end-of-life tyre processing plant.
The new-generation recycling plant will support the circular economy with innovative recycling processes. Scrap tyres will be collected directly from customer premises, then transported to the plant to be cut up and recycled. Enviro’s technology, which produces new, high-quality reusable materials like carbon black, pyrolysis oil, gas and steel, will enable everything in an end-of-life tyre to be recovered for reuse.
Current plans call for 90% of the recovered materials to be reused in a variety of rubber-based products, such as tyres, conveyor belts and anti-vibration products. The remaining 10% will be reused directly by the plant to generate its own-use heat and power. This initial recycling plant will enable Michelin to offer a comprehensive recycling solution, from collecting end-of-life tyres to reusing the recovered raw materials in the manufacture of new products.
“Thanks to this joint venture with Enviro, we are very proud to announce the construction of the Michelin Group’s first recycling plant. This is a major milestone that will enable us to offer customers a new-generation recycling solution, while developing new business for the Group. We are currently in talks with several Chilean mining customers to sign long-term contracts. By scaling up Enviro’s technology, we are offering them a solution that will support their environmental objectives and enables the development of a circular economy,” said Sander Vermeulen, Vice President, Marketing & Business Development, Strategy and New Business for the High-Tech Materials business line.
Michelin said that the future tyre recycling plant is fully aligned with the Group’s commitment to incorporating an increasing amount of sustainable materials in its tyres, as illustrated by the VISION Concept. “Aware that the speed and nature of innovation in this area require new forms of cooperation, Michelin has positioned itself as a unifying force for developing innovative partnerships across a diverse range of technological disciplines. This manifestation of the partnership with Enviro follows on from other initiatives and partnerships forged with trailblazers in the area of recycling and sustainable materials. The underlying goal in the many partnerships and initiatives in which Michelin is participating is to create and develop recycling systems, for end-of-life tyres but also for plastic waste.”
Michelin and Enviro have also signed three definitive agreements that form the basis of the companies’ strategic partnership. The agreements regulate the terms for a jointly owned plant for the recycling of end-of-life tyres in Chile, the terms and conditions for Michelin’s use of Enviro’s patented technology, and payment for this, and the terms and conditions for payment to Enviro for deliveries of technology and services to the jointly owned plant in Chile. Before the agreements can enter into force, they must be approved by Enviro’s owners at an Extraordinary General Meeting (EGM).
The three agreements and their main content are as follows:
- A shareholder agreement concerning a joint venture the purpose of which is to establish a jointly owned recycling plant in Chile based on Enviro’s patented technology
- The agreement entails that Enviro will own a 10% stake in the joint venture while Michelin will own the remaining 90%. Under the agreement, Enviro will also make a capital contribution of approximately SEK 20 million to the joint venture and will receive royalty payments in accordance with license agreement described below.
- A license agreement that extends through 2035 and which entitles Michelin to establish its own recycling plants based on Enviro’s technology. When establishing such plants, Michelin will pay Enviro with a fixed amount per plant and pay royalties to Enviro based on a percentage of the plants’ sales.
- An agreement that regulates the conditions and the payment to Enviro for design, as well as engineering and project services in connection with the establishment of the plant in Chile. In total, Enviro will receive payment for this of approximately SEK 15 million. The SEK 4 million order communicated in January is part of that total amount