Li-Cycle receives $475 million government loan for battery recycling plant
The recycling plant has a long history: Li-Cycle announced the plant in Rochester in September 2020 and wanted to open its doors as early as 2022. The date was then pushed back to the end of 2023. However, construction was halted in November 2023, partly because the costs significantly exceeded previous forecasts.
The $475 million loan now granted for what would be one of the largest US sources of the battery metal lithium cements an important part of Joe Biden’s climate agenda. The loan, released just hours after Donald Trump’s election victory, is intended to make Li-Cycle independent of the steps taken by the future Trump administration. The news agency Reuters reports that the recycling plant can be completed with the money within twelve to 15 months.
“The loan demonstrates (the Energy Department’s) role in supporting a strong domestic EV battery and critical materials supply chain, which is critical to strengthening America’s national and energy security,” Jigar Shah, head of the Energy Department’s Loan Program Office, which issued the financing, told Reuters.
Ajay Kochhar, President and CEO of Li-Cycle, said: “Throughout 2024, one of Li-Cycle’s primary objectives has been to finalize negotiations with the DOE in order to enter into definitive documentation to obtain a DOE loan. Today, we are excited to announce our achievement of this significant milestone, which we believe represents a strong vote of confidence in Li-Cycle’s patented and environmentally friendly recycling technology and business model.”
Li-Cycle had been seeking the loan for almost three years, but cost overruns and technical issues forced it to hire an expert to restructure the company last year. The move raised questions among investors about the company’s survival. Li-Cycle’s share price fell by 75 per cent on the stock market within a year. While Washington reviewed the loan application, Li-Cycle was up in the air and could not press ahead with its business plan.
The company has been operating a battery recycling plant in Magdeburg in Germany since August 2023. There, Li-Cycle uses its patented third-generation spoke technology, which can directly process all lithium-ion battery waste, including complete battery packs from electric vehicles, without discharging, dismantling or the use of thermal processes. The intermediate product produced is the so-called ‘black mass,’ which contains a range of valuable battery materials such as lithium, nickel and cobalt.
The company intends to further process this black mass in its hub systems. The facility in the US state of New York will be the first Li-Cycle hub.
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