From Treehugger:

Researchers at the University of South Florida have created a process for extracting lithium and cobalt from lithium-ion batteries that is straight from nature. The researchers found that fungi can safely and simply extract the metals from used batteries, keeping the materials out of landfills and ready to be reused in new batteries.

The batteries are first taken apart and the cathodes are pulverized. Then three different strains of fungus — Aspergillus niger, Penicillium simplicissimum and Penicillium chrysogenum — take over.

“Fungi naturally generate organic acids, and the acids work to leach out the metals,” explained Jeffrey A. Cunningham, Ph.D., the project’s team leader, to the American Chemical Society. “Through the interaction of the fungus, acid and pulverized cathode, we can extract the valuable cobalt and lithium. We are aiming to recover nearly all of the original material.”

For an in depth discussion on the application of fungi to the recycling process, check out this video from The American Chemical Society: