Li-Cycle on deck for a $375M DOE loan

Keeping with its goal to support companies' endeavoring to establish a domestic battery materials supply chain for electric vehicles and associated technologies that will require the same minerals and metals, the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing (ATVM) loan program has conditionally committed to loaning Li-Cycle $375 million to expand its recycling efforts in the United States.

As an industry leader in lithium-ion battery recovery and the leading lithium-ion battery recycler in North America, Li-Cycle has been advancing its spoke-and-hub system to recycle end-of-life batteries and other electronic devices to obtain the necessary materials to help offset the demand for EV batteries.

The loan follows extensive DOE technical, market, financial, and legal due diligence and marks another significant milestone by endorsing Li-Cycle's development of the first commercial hydrometallurgical resource recovery facility in North America – to be built near Rochester, New York.

This is the first conditional commitment from the DOE ATVM program for a sustainable pure-play battery materials recycling company and the program's main support for the lithium-ion battery recycling industry.

"We are delighted to receive the first conditional commitment from the DOE LPO (Loan Programs Office) for a resource recovery facility, as it further supports our efforts to create a sustainable domestic supply chain of battery-grade materials in the U.S. and to grow American jobs," said Li-Cycle President and CEO Ajay Kochhar.

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

Li-Cycle's spoke and hub business model is focused on an innovative vertically integrated two-step lithium-ion battery recycling and resource recovery process. This supports the building of localized supply chains for battery-grade materials to accelerate the clean energy transition.

The first hub to be established in Rochester, New York, is expected to become a significant domestic source of battery-grade materials and will also be the first-of-its-kind commercial facility in North America.

"The Rochester Hub is a cornerstone asset for Li-Cycle and its stakeholders and will be an important contributor to the clean energy economy," said Kochhar. "As a sustainable pure-play battery material recycling company, we expect the Rochester Hub will position Li-Cycle as a leading domestic producer of recycled battery-grade materials for accelerating electrification demand to address climate change and secure energy independence."

Receiving the conditional commitment is a significant step in the lending process and reflects DOE's intent to finance the project; however, the loan remains subject to documentation of long-form agreements, and certain conditions will have to be satisfied prior to finalization, which Li-Cycle says is expected during second-quarter 2023.

Additionally, the loan will have a term of up to 12 years from financial close, and interest on the loan will be set at the 10-year U.S. Treasury Rates from the date of each advance for the loan.

"We would like to thank the DOE LPO team for their time, support and partnership during this process, and we look forward to our collective efforts to complete the final agreements," said Li-Cycle CFO Debbie Simpson.