Lithium battery recycler loaned $375 million for New York hub

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Lithium-ion battery recycler Li-Cycle announced the successful close of a $375 million conditional loan from the U.S. Department of Energy (DOE) Advanced Technologies Vehicles Manufacturing (ATVM) program, supporting the buildout of its Rochester, N.Y.  recycling facility hub. 

The planned facility encompasses a 65 acre, 14-building hydrometallurgical or wet chemistry hub plant that refines battery-grade materials from battery “black mass.” Once complete, it will be the largest of its kind in North America and Europe, while the company expects commissioning for the facility to begin in 2023, with engineering, procurement, and construction already underway.

Black mass is generated from pre-processed retired lithium-ion batteries at the company’s distributed local “spoke” facilities. The black mass is then transferred to a “hub” facility like the Rochester plant, where it is reclaimed as usable battery materials. The company said its process has an up to 95% recycling efficiency rate.

Li-Cycle said as much as 414,000 tonnes of lithium-ion batteries will reach end-of life annually in North America by 2025, presenting a large opportunity to create a circular economy, rather than letting it go to waste.

The Loan Programs Office conditional loan follows extensive technical, market, financial, and legal due diligence evaluating the company’s first lithium-ion battery resource recovery facility in North America. The DOE loan will have a term of up to 12 years from financial close, and interest will be based on the 10-year U.S. Treasury Rates from the date of each advance for the loan. 

“Our process is a submerged shredding process,” said Tim Johnston, executive chairman, Li-Cycle. “There’s a number of key benefits to this, one being that we can process all form factors of lithium-ion batteries. It doesn’t matter the size; it doesn’t matter the chemistry: from the smallest format lithium-ion battery all the way through to the largest electric vehicle module.”

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.

“$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,” said Senator Charles Schumer (D-NY). “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.”

A stable supply of lithium and other critical battery materials considered by DOE to be a matter of national security. The materials are needed to support EV battery demand and energy storage ranging from residential to grid-scale. While the U.S. is making strides toward manufacturing batteries, it is limping behind in the race for raw materials. China currently has over 80% of the world’s lithium refining capacity, over 60% for cobalt, and more than a third of global nickel refinement, said the report.

(Read: “Recycling: a key in the U.S. quest for lithium-ion battery supply chain relevancy”)

A Wood Mackenzie report projects a need for a 70% rise in U.S. production of nickel by 2040; 200% for cobalt; and 600% for lithium. China has positioned itself well for the future of these resources, increasing ownership of cobalt mines in the Democratic Republic of Congo, lithium in Chile, and nickel in Indonesia.

“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,” said Schumer.

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