Glencore invests $200M into Li-Cycle

Lithium-ion battery recycling company Li-Cycle Holdings Corp. has entered into a strategic partnership with Glencore plc, with an initial investment of $200 million toward improving the electric vehicle supply chain.

"We are thrilled to have Glencore as a long-term strategic investor and global commercial partner," said Li-Cycle CEO Ajay Kochhar. "Bringing our complementary capabilities together will accelerate the path to a circular economy for critical materials in the lithium-ion battery supply chain."

The two companies have announced a global feedstock supply agreement under which Glencore will supply all types of manufacturing scrap and end-of-life lithium-ion batteries to Li-Cycle. Additionally, the two companies have reported a non-binding term sheet for global, long-term strategic contracts, which would complement Li-Cycle's existing off-take and marketing agreements.

"These agreements further secure and diversify our lithium-ion battery supply and feedstock sources, competitively positioning our network expansion in North America and Europe," Kochhar added.

Established in Ontario, Canada, Li-Cycle has developed a method to safely and sustainably recycle spent lithium-ion batteries with its unique proprietary solvent extraction process via a "spoke and hub model."

The spokes are a distribution network that takes all types of lithium-ion batteries and transforms them into an inert product that is then shredded and separated.

The remains, colloquially known as "black mass" – a powder comprised of lithium, nickel, and cobalt from the cathode side of the batteries and graphite on the anode side – are then taken to the hub.

Under the Li-Cycle strategy, each centralized hub will be fed material from 12 spokes. At the hubs, the black mass is converted to battery-grade chemicals through the use of a non-thermal process that purifies the materials back into the stuff needed for future lithium-ion batteries.

"The $200 million investment by Glencore will enhance Li-Cycle's already strong balance sheet and will provide us with total cash greater than our anticipated capital needs for the completion of the Rochester hub and the fives spokes currently in development and our operating needs for the next two years," said Debbie Simpson, chief financial officer of Li-Cycle.

The key commercial arrangements underpinning this strategic partnership will begin with the closing of the initial work needed to kickstart the exchange between Li-Cycle and Glencore; these include:

• Glencore to supply feedstock and black mass for Li-Cycle spoke and hub facilities.

• Offtake of black mass from Li-Cycle spoke facilities.

• Offtake of battery-grade end products produced by Li-Cycle.

• Offtake of byproducts from Li-Cycle facilities.

• Supply of sulfuric acid, one of the key input ingredients for Li-Cycle hubs.

Upon execution of the commercial agreements, Glencore will make the $200 million investment in Li-Cycle, of which Glencore will have the right to nominate one board member to the Li-Cycle board.

"We are excited to announce this new strategic partnership with Li-Cycle. We both believe that battery recycling will form a key part of the energy transition," said Kunal Sinha, head of recycling at Glencore and the agreed-upon nominee for Li-Cycle's board of directors. "Our bold aim is to help support the creation of a genuinely circular economy that supplies recycled materials and minerals back into the battery supply chain."

Glencore, one of the world's largest global diversified natural resource companies and a major producer and marketer for more than 60 responsibly sourced commodities, made its own announcement regarding the partnership.

"We are united in our ambition to further the energy and mobility transition," Sinha added. "Glencore's industry-leading Net Zero total emissions reduction strategy is supported by key investments such as this, which is also expected to complement our existing investments and relationships with key partners in the battery and EV space."