On Monday, the US Energy Department announced that it would lend $375 million to Li-Cycle Holdings Corp as it constructs a battery recycling plant in New York that will become one of the country’s most significant sources of lithium by next year.
The loan is the latest step taken by Washington to promote the growth of a domestic electric vehicle supply chain, with increased battery recycling accommodation seen as critical to meeting President Joe Biden’s goal of electrifying half of new US vehicles by 2030.
One of the benefits of recycling is it can bring metals to market more confidently than some of the mining companies that take a bit longer to go from the identification of the resource to full production
Jigar Shah, Head of the Energy Department’s Loan Programs Office stated on Li-cycle’s battery recycling
Li-Cycle needs $485 million to launch
The loan, which has been under consideration for more than a year, will have a 12-year term and a rate of interest that matches the 10-year US Treasury rate when funds are released, which is anticipated in July.
Senator Chuck Schumer of New York, the Senate majority leader, has long advocated for Li-Cycle to earn the funding.
The Li-Cycle processing facility in Rochester, New York, is set to open later this year at approximately $485 million.
Li-Cycle, owned by mining giant Glencore Plc, has the funds to pay for the Rochester plant, so the loan will help the company develop elsewhere.
What this does for us is further accelerate our work and open up optionality to do other things
Ajay Kochhar, Chief Executive of Li-cycle stated on loan opportunity
Li-Cycle to produce 8,500 tonnes of lithium carbonate annually
The company has built a network of facilities in Arizona, Alabama, and Ontario to manufacture black mass, primarily shredded battery parts.
The black group will be broken down into lithium and other metals at the Rochester facility.
As the facility steps up in 2024, Li-Cycle hopes to generate 8,500 tonnes of lithium carbonate per year, making it one of the largest sources of battery metal in the United States.
Last month, the Energy Department decided to lend $2 billion to Li-Cycle competitor Redwood Materials and $700 million to pioneer Ltd’s Rhyolite Ridge lithium mining project.
