Recycling lithium-ion batteries (LIBs) can supplement critical materials and improve the environmental sustainability of LIB supply chains. In this work, environmental impacts (greenhouse gas emissions, water consumption, energy consumption) of industrial-scale production of battery-grade cathode materials from end-of-life LIBs are compared to those of conventional mining supply chains. Converting mixed-stream LIBs into battery-grade materials reduces environmental impacts by at least 58%. Recycling batteries to mixed metal products instead of discrete salts further reduces environmental impacts. Electricity consumption is identified as the principal contributor to all LIB recycling environmental impacts, and different electricity sources can change greenhouse gas emissions up to five times. Supply chain steps that precede refinement (material extraction and transport) contribute marginally to the environmental impacts of circular LIB supply chains (<4%), but are more significant in conventional supply chains (30%). This analysis provides insights for advancing sustainable LIB supply chains, and informs optimization of industrial-scale environmental impacts for emerging battery recycling efforts.