US offers US$375 million loan to Li-Cycle for battery-recycling project

THE US subsidiary of Li-Cycle Holdings has received a US$375 million loan offer from the Biden administration for the expansion of a lithium-ion battery-recycling plant in New York.

Li-Cycle’s facility, in the city of Rochester, recycles old lithium-ion batteries into chemicals that can he used for the batteries of more than 200,000 electric vehicles (EVs) a year. The facility is slated to open later this year at a cost of roughly US$485 million.

The conditional loan, which was in review for more than a year, will have a 12-year term and an interest rate matching the 10-year US Treasury rate when funds are issued. This is expected to be by July.

The offer comes as the White House seeks to have half of all vehicles sold by 2030 be zero-emission, and as it seeks to create a domestic battery supply chain. It also follows a US$2 billion commitment announced earlier this month to Redwood Materials, an EV battery component maker and fellow lithium-ion battery recycler.

“By supporting a circular economy for critical materials, the project is expected to reduce the US’ reliance on global supply chains or new mining,” the Energy Department said of its financing offer to Li-Cycle. “The critical materials that make up EV batteries are in high demand and can be difficult to procure.”

Demand for lithium, which also is used for grid storage and weapons, is expected to exceed current production by 2030. The US relies on international markets for the processing of most raw materials, the department said.

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The department added: “Currently, a handful of countries control most of the global battery-recycling supply chain, with China dominating lithium carbonate refining markets. Li-Cycle expects its facility to be the first source of recycled battery-grade lithium carbonate in North America.” BLOOMBERG, REUTERS