Li-Cycle, on the New York Stock Exchange, August 11, 2021.
Source: New York SE
Battery recycling company Li-Cycle announced Monday that it has received a $375 million contingent loan from the Department of Energy to develop a recycling facility for key battery materials near Rochester, New York.
In the case of lithium-ion batteries in particular, the focus was primarily on mining. While the US has plenty of lithium, it’s expensive to get from the ground and projects often face local opposition.
Lithium prices have bounced back from record levels reached earlier this year, but prices are still up more than 800% over the past three years. The rapid increase in value comes as some believe there simply won’t be enough supply to meet the growing demand for electric vehicles.
The Rochester facility will significantly expand Li-Cycle’s reach. The company currently has four plants in North America processing battery materials. But the new facility will be able to go one step further and turn the recycled product into materials that can be used in future batteries.
According to the company, when fully operational, the facility will recycle up to 200,000 vehicles worth of lithium-ion batteries annually. From this, the site will produce 8,500 tons of lithium carbonate as well as nickel sulphate and cobalt sulphate.
Monday’s announcement comes amid the United States’ push to develop domestic manufacturing and supply chains for materials and technologies critical to the energy transition. Inflation-reducing stimulus and credit have fueled a spate of announcements from companies trying to boost operations on US soil.
Earlier this year, the Department of Energy announced a conditional loan of up to $700 million to mining company Ioneer to develop the Rhyolite Ridge lithium-boron project in Esmeralda County, Nevada.
But Li-Cycle co-founder and CEO Ajay Kochhar also said recycling will play a key role.
“Recycling is an unappreciated or underappreciated contribution to alleviating this supply need,” he told CNBC. “I think we need both primary, ie mine sources, of course, and secondary … every unit of lithium, nickel, cobalt counts. I think with the overlay of the IRA and the overlay of corporate goals around the sourcing of these materials, recycling is going to be very important.”
Kochhar predicts that the recycling industry could provide between 10% and 20% of demand for battery-grade lithium, nickel and cobalt over the next 10 years. He believes that in thirty years’ time, recycling will account for a “very significant part of demand”, potentially covering more than 50%.
“Everyone strives to get units. Every unit counts. Being a relief – a domestic source, a clean source, is very helpful to our customers,” he added.
If approved, the loan, which is subject to certain conditions, will be made under the DOE’s Advanced Technology Vehicles Manufacturing program. Li-Cycle said it expects the loan to close in the second quarter, with the company planning to start commissioning the Rochester facility later this year.
Li-Cycle was founded in 2016 and went public in August 2021 via a SPAC. The company has received strategic investments from Glencore, Koch Strategic Platforms and LG Chem.