U.S. finalizes USD 475 million loan for Li-Cycle’s battery recycling facility

A key player in battery recycling, the U.S. Department of Energy has finalised a USD 475 million loan to Li-Cycle Holdings to fund a new plant in Rochester, New York. Li-Cycle will use the loan, which is USD 100 million higher than when it was first announced last year, to process used batteries, a critical step in building domestic supply chains for electric vehicles (EVs). The project is of a piece with outgoing President Joe Biden’s climate agenda, which seeks to lessen the nation’s reliance on foreign lithium and other mineral resources essential to EV production.

Both of these are backed by Swiss mining giant Glencore, and both are facing a tough tug on the past year: rising inflation, cost overruns, and technical delays. The company's stock has declined more than 75 percent and had battled to raise needed funding while also awaiting government approval. Li-Cycle can raise the remaining USD 960 million it needs to complete its USD 960 million project with the new loan package, which includes USD 445 million in principal and USD 30 million in capitalised interest.

Once operational, the Rochester facility will be North America’s largest lithium processing plant producing 8,250 metric tons of lithium carbonate and a substantial quantity of mixed hydroxide precipitate (MHP), a battery precursor material containing nickel and cobalt. The facility will also sell all MHP produced from the deal with Glencore, helping make the project as viable as possible.

The loan is a key piece of Biden’s larger plan to build up the U.S. electric vehicle and critical minerals supply chain. Ahead of taking office in January, Donald Trump is seen as posing potential challenges to renewable energy initiatives, and Biden's team is fast tracking loans and approvals for green energy projects.

Li-Cycle's new facility is expected to create 825 construction jobs and 200 permanent positions once operational. The company is also working to secure private investment to complete the project, with construction slated to begin within the next year.