Lithium battery recycler Li-Cycle receives $375 million loan from DoE

Li-Cycle, on the New York Stock Exchange, August 11, 2021.

Source: NYSE

Battery recycling company Li-Cycle said Monday it has received a $375 million conditional loan from the Department of Energy to develop a recycling facility for key battery materials near Rochester, New York.

For lithium-ion batteries in particular, the focus was largely on mining. While the US has an abundance of lithium, getting it out of the ground is expensive, and projects often face local opposition.

The price of lithium has fallen from record levels reached earlier this year, but prices have still risen by more than 800% in the past three years. The rapid appreciation comes as some believe there simply won’t be enough supply to meet the growing demand for electric vehicles.

The Rochester facility will significantly expand Li-Cycle’s reach. The company currently has four plants in North America where it processes battery materials. But the new plant can go one step further and turn the recycled product into materials that can be used for future batteries.

When fully operational, the plant will recycle up to 200,000 lithium-ion battery vehicles annually, according to the company. From that, the site will produce 8,500 tons of lithium carbonate, as well as nickel sulfate and cobalt sulfate.

Monday’s announcement comes amid pressure from the United States to develop domestic production and supply chains for materials and technologies critical to the energy transition. The incentives and credits in the Inflation Reduction have led to a flurry of announcements from companies looking to jump-start their operations on US soil.

Earlier this year, the Department of Energy announced a conditional loan of up to $700 million to miner Ioneer to develop the Rhyolite Ridge Lithium-Boron Project in Esmeralda County, Nevada.

But Li-Cycle co-founder and CEO Ajay Kochhar said recycling will also play a key role.

“Recycling is an unappreciated, or not so appreciated, mitigator of that supply need,” he told CNBC. “I think, of course, we need both primary, i.e. mining resources, and secondary…each unit counts lithium, nickel, cobalt. I think with the overlay of the IRA and the overlay of the corporate objectives around procurement for these materials , recycling is becoming very important.”

Kochhar predicts that the recycling industry could cover between 10% and 20% of the demand for lithium, nickel and cobalt for batteries in the next 10 years. Thirty years later, he believes recycling will be a “very significant portion of demand,” possibly over 50%.

“Everyone is rushing to get units. Every unit counts. Being a relief — a domestic source, a cleaner source is super helpful to our customers,” he added.

If approved, the loan, subject to certain conditions, will be provided under DOE’s Advanced Technology Vehicles Manufacturing program. Li-Cycle said it expects the loan to close in the second quarter, with the company planning to begin commissioning the Rochester facility by the end of this year.

Li-Cycle was founded in 2016 and went public in August 2021 through a SPAC. The company has received strategic investments from Glencore, Koch Strategic Platforms and LG Chem.


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