US finalizes $475 million loan for Li-Cycle battery recycling plant

A key player in battery recycling, the U.S. Department of Energy has completed a $475 million loan to Li-Cycle Holdings to finance a new plant in Rochester, New York. Li-Cycle will use the loan, which is $100 million more than when it was first announced last year, to recycle used batteries, a major step in building domestic electric vehicle (EV) supply chains. The project is in line with outgoing President Joe Biden’s climate agenda, which aims to reduce the country’s dependence on foreign lithium and other mineral resources needed to make electric vehicles.

Both companies are backed by Swiss mining giant Glencore, and both have faced difficult challenges in the past year: rising inflation, cost overruns and technical delays. The company’s shares fell more than 75 percent and it had to struggle to raise the necessary financing while waiting for government approval. Li-Cycle can raise the remaining $960 million needed to complete the $960 million project with a new debt package that includes $445 million in principal and $30 million in capitalized interest.

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

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

Once operational, the new Li-Cycle facility is expected to create 825 construction jobs and 200 permanent jobs. The company is also working to attract private investment to complete the project, which is scheduled to begin construction next year.