RENO, Nev. (AP) — A massive lithium battery recycling plant has been awarded more than $105 million in tax incentives for expanding operations in northern Nevada.

The state Office of Economic Development approved incentives for Carson City-based Redwood Materials this week. It marks the second-largest capital investment in the office’s history, behind Tesla.

Founded by a former Tesla executive, Redwood has promised to invest more than $1 billion in its expansion plans, with the goal of boosting the transition from fossil fuels to lithium batteries more quickly by localizing the supply chain.

Redwood recovers 95% of the metals from batteries, including lithium, and manufactures battery components. The company has said it wants to keep what it calls a tight supply chain circle in Nevada.

“This investment in Nevada is an affirmation of the importance our state plays in the global lithium industry economy,” Gov. Steve Sisolak said in a statement, adding that the state expects a $5.6 billion return on the investment.

Redwood promises to create about 700 jobs with its expansion in Storey County, east of Reno. About one-third of the jobs are expected by mid-2025, and the average wage will be $32 per hour.

Since lithium was discovered more than two centuries ago, it has been used in everything from psychiatric medicine to lubricating grease.

Now, ramped up domestic production is key to the Biden administration’s blueprint for a greener future. Worldwide demand for the lightest metal on Earth is projected to increase sixfold by 2030 compared with 2020 since it’s a critical element for electric vehicle batteries.

Thursday’s announcement of the tax incentives comes as legal battles continue over two potential lithium mines and a geothermal power plant in Nevada, the largest U.S. gold-mining state. Opposition has come from Native American tribes concerned about drilling on sacred land and conservationists who say the environmental impacts of the mines have not been thoroughly reviewed.

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