Funding to Restart Construction of Flagship Rochester Hub, Supporting U.S. Battery Materials Supply Chain
Li-Cycle Holdings Corp., based in Toronto, has secured a $475 million loan from the U.S. Department of Energy (DOE). This loan includes up to $445 million in principal and up to $30 million in capitalized interest. The funding will support the development of Li-Cycle’s flagship Rochester Hub in New York. This is the first DOE loan facility dedicated to a lithium-ion battery recycling company, underscoring the growing need for domestic recycling infrastructure to strengthen the U.S. battery materials supply chain.
Loan to Fund Rochester Hub’s Development and Expansion
The Rochester Hub will be North America’s first commercial hydrometallurgical resource recovery facility. As a result, it will produce key battery materials such as battery-grade lithium carbonate and mixed hydroxide precipitate (MHP). However, the project was delayed over a year ago due to rising construction costs. Fortunately, with financial support, construction will now resume. Once operational, the hub will process 35,000 tons of black mass annually, producing 8,250 tons of lithium carbonate and 72,000 tons of MHP. These materials, which contain nickel, cobalt, and manganese, are essential for electric vehicle (EV) and battery production. In addition, Li-Cycle has secured a 100% offtake agreement for the MHP produced with its long-term partner, Glencore.
Strategic Impact on Jobs and the U.S. Battery Supply Chain
The Rochester Hub project will help advance sustainable energy practices and create jobs. The facility is expected to generate 825 construction jobs and over 200 permanent jobs once fully operational. Li-Cycle’s CEO, Ajay Kochhar, said that securing this loan is a crucial step to restart construction. He added that it demonstrates the DOE’s confidence in Li-Cycle’s recycling technology and business model. This loan will provide the necessary capital to complete the Rochester Hub and strengthen Li-Cycle’s position in the energy transition.
Cost Estimates and Financing Strategy
The total capital cost to complete the Rochester Hub is $960 million. By September 30, 2024, Li-Cycle needs to fund $487 million, which includes $92 million in costs already incurred. The company is exploring additional financing options to complete the project.
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