Most people, when they hear “battery recycling,” immediately think of Redwood Materials, the company founded by former Tesla CTO JB Straubel. But as much as Redwood Materials is the best known battery recycling company, Li-Cycle, headquartered in Toronto, Canada, is the first recycling company in North America to actually supply reclaimed battery grade lithium to customers.
On February 27, the company announced it has qualified for a conditional $375 million loan from the US Department of Energy Advanced Technology Vehicles Manufacturing program. The money will be used to support the development of the company’s Rochester Hub located near Rochester, New York. CleanTechnica readers will recall that Redwood Materials also received a conditional loan approval from DOE for $2 billion. That money will be used to construct a new recycling factory in Nevada.
Li-Cycle Spoke And Hub System
Li-Cycle uses an innovative vertically integrated two-step lithium-ion battery recycling and resource recovery process. This Spoke & Hub business model supports the building of localized supply chains for battery grade materials to accelerate the clean energy transition. The Company continues to scale its Spoke & Hub network to enable up to an overall 95% recycling efficiency rate. The Li-Cycle’s Spoke & Hub Technologies enable the return of battery materials back to the domestic supply chain for re-use by battery manufacturers and electric vehicle and energy storage producers for a circular economy.
The Spokes utilize the Company’s patented and environmentally friendly technology to recycle end of life battery materials and manufacturing scrap, including directly processing full electric vehicle and energy storage battery packs through a submerged shredding process without any discharging or dismantling. At the present time, Li-Cycle has four operational Spokes in North America with total processing capacity of more than 50,000 tonnes of lithium-ion battery material per year. The Spokes produce an intermediate product called black mass, which contains a number of critical metals and will be sent to the Rochester Hub for further processing into battery grade materials.
The conditional loan commitment follows extensive DOE technical, market, financial, and legal due diligence and marks another significant milestone endorsing Li-Cycle’s development of the Rochester Hub, which is the first commercial hydro-metallurgical resource recovery facility in North America. It is the first conditional commitment from the ATVM program for a sustainable battery materials recycling company and the program’s main support for the lithium ion battery recycling industry. The Rochester Hub’s hydro-metallurgical process produces no wastewater discharge, has a minimal solid waste stream, and boasts low air emissions.
The Rochester Hub is expected to become a significant domestic source of battery grade materials, including lithium, nickel, and cobalt and will be the first of its kind commercial facility in North America. Receiving the conditional commitment is a significant step in the lending process and reflects the DOE’s intent to finance the project. The loan remains subject to documentation of long form agreements and certain conditions will have to be satisfied prior to closing, which is currently expected to occur in the second quarter of 2023. The loan will have a term of up to 12 years from financial close, and interest on the Loan will be the 10-year US Treasury rate on the date of each advance for the Loan.
“We are delighted to receive the first conditional commitment from the DOE LPO for a resource recovery facility, as it further supports our efforts to create a sustainable domestic supply chain of battery-grade materials in the U.S. and to grow American jobs,” said Ajay Kochhar, Li-Cycle co-founder and CEO. “The Rochester Hub is a cornerstone asset for Li-Cycle and its stakeholders and will be an important contributor to the clean energy economy. As a sustainable pure-play battery material recycling company, we expect the Rochester Hub will position Li-Cycle as a leading domestic producer of recycled battery grade materials for accelerating electrification demand to address climate change and secure energy independence.”
“We would like to thank the DOE loan team for their time, support, and partnership during this process. We look forward to our collective efforts to complete the final agreements,” commented Debbie Simpson, Li-Cycle chief financial officer. “This strategic financing achieves our commitment to execute on additional funding opportunities with debt that best optimizes our capital structure. The possibility of this substantial amount of government funding at favorable terms enhances our already robust balance sheet and provides flexibility for continued expansion and future growth plans.”
“$375 million will now supercharge Li-Cycle here in Rochester, with 270 good-paying jobs, to become one of America’s largest suppliers of recycled materials for batteries. Last year, I stood alongside Li-Cycle’s powerhouse workforce and promised I would push to deliver federal funding to spark more growth, and now thanks to the investments I secured in the Inflation Reduction Act, Rochester will help power America’s drive to lead in battery technology,” said Senator Charles Schumer. “This DOE investment in Li-Cycle will reduce our reliance on China and strengthen America’s battery supply chain. And once the facility is at full steam, it is projected to be the biggest source of lithium carbonate in the United States. That means the heart of hundreds of thousands of electric vehicles, which will soon dominate our roads, will be made with battery components from right here in Rochester.”
Designed To Handle 35,000 Tons A Year
The Rochester Hub is designed to have a processing capacity of up to 35,000 tons of black mass per year, which is equivalent to approximately 90,000 tonnes of lithium-ion battery material or 18 gigawatt-hours of lithium-ion batteries. Once fully operational, the Rochester Hub is expected to deliver annual production of up to 8,500 tonnes of lithium carbonate, 48,000 tonnes of nickel sulphate, and 7,500 tonnes of cobalt sulphate.
The Rochester facility and its warehouse are strategically located on more than 65 acres of land at the Eastman Business Park in Rochester, New York. The site was chosen specifically to leverage existing infrastructure for power and transportation as well as a talented local workforce. It will create up to 270 permanent jobs and more than 1,000 jobs during construction. It is expected to begin operations by the end of this year.
Last year, the company received a $200 million investment from Swiss mining and commodities giant Glencore. The two companies executed a global feedstock supply agreement in which Glencore will supply all types of manufacturing scrap and end of life lithium-ion batteries to Li-Cycle. Both LG Energy Solution and LG Chem have named Li-Cycle as their preferred battery recycling partner.