Li-Cycle Secures $475M Loan from DOE to Develop North America’s First Battery Recycling Hub

Funding to Restart Construction of Flagship Rochester Hub, Supporting U.S. Battery Materials Supply Chain
Li-Cycle Holdings Corp., a Toronto-based leader in lithium-ion battery (LIB) recycling, has finalized a $475 million loan agreement with the U.S. Department of Energy (DOE). This loan, which includes up to $445 million in principal and up to $30 million in capitalized interest, is set to support the development of Li-Cycle’s flagship Rochester Hub project in New York. This marks the first DOE loan facility dedicated to a lithium battery recycling company, reflecting the growing importance of domestic recycling infrastructure in strengthening the U.S. battery materials supply chain.

Loan to Fund Rochester Hub’s Development and Expansion
Li-Cycle’s Rochester Hub is poised to become North America’s first commercial hydrometallurgical resource recovery facility, aimed at producing crucial battery materials, including battery-grade lithium carbonate and mixed hydroxide precipitate (MHP). The project, which was delayed over a year ago due to escalating construction costs, is now set to resume with this financial support.

Once operational, the Rochester Hub will process up to 35,000 tons of black mass annually, producing 8,250 tons of lithium carbonate and 72,000 tons of MHP per year. These materials, which contain nickel, cobalt, and manganese, are critical for the production of new lithium-ion batteries used in electric vehicles (EVs) and other applications. Li-Cycle has already secured a 100% offtake agreement for the MHP produced at the facility with its long-term partner Glencore, cementing its role as a key player in the EV battery supply chain.

Strategic Impact on Jobs and the U.S. Battery Supply Chain
The Rochester Hub project is not only a significant step in advancing sustainable energy practices, but it will also create significant employment opportunities. The facility is expected to generate 825 construction jobs and more than 200 permanent jobs once fully operational. Li-Cycle’s President and CEO, Ajay Kochhar, highlighted that this loan facility is a critical enabler for restarting construction and reinforcing Li-Cycle’s mission to create a closed-loop battery supply chain in North America.

“Securing this DOE loan is a major achievement for Li-Cycle and a testament to the confidence the DOE has in our innovative recycling technology and business model,” said Kochhar. He emphasized that the loan terms are favorable compared to other financing options and will provide the necessary capital to complete the Rochester Hub and further Li-Cycle’s role in the energy transition.

Cost Estimates and Financing Strategy
The total capital cost to complete the Rochester Hub project is estimated at $960 million. As of September 30, 2024, approximately $487 million remains to be funded, including $92 million in already-incurred costs. Li-Cycle is actively exploring additional financing options to complete the project and ensure its financial flexibility.