The U.S. Department of Energy, a major player in battery recycling, has completed a $475 million loan to Li-Cycle Holdings to finance a new factory in Rochester, New York. Li-Cycle will use the loan, which is $100 million larger than when it was first announced last year, to process used batteries, a crucial step in building domestic supply chains for electric vehicles (EVs). 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 essential for electric vehicle production.
Both are backed by Swiss mining giant Glencore, and both have faced serious problems in the past year: rising inflation, cost overruns and technical delays. The company’s shares have fallen more than 75 percent and struggled to raise the necessary financing while also awaiting government approval. Li-Cycle can raise the remaining $960 million it needs to complete its $960 million project with the new loan package, which 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 a significant amount of mixed hydroxide precipitate (MHP), a battery precursor material containing nickel and cobalt. The facility will also sell all the MHP produced from the deal with Glencore, making the project as viable as possible.
The loan is a key part of Biden’s larger plan to build the U.S. supply chain for electric vehicles and 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 fast-tracking loans and approvals for green energy projects.
Li-Cycle’s new factory is expected to create 825 construction jobs and 200 permanent jobs once operational. The company is also working to secure private investment to complete the project, with construction set to begin next year.