The US Provided A $475m Loan To Battery Maker Li-Cycle

According to Reuters, on November 7, the US Department of Energy finalized a $475 million loan to Canadian lithium battery recycling company Li-Cycle, which provides financial support for Li-Cycle to build a battery processing facility in New York State. The plant is also seen as a key part of outgoing President Joe Biden's vision for a domestic electric vehicle supply chain in the United States.

The loan, which includes $445 million in principal and $30 million in capitalized interest, will allow Li-Cycle to now raise private capital to fund the remainder of its $960 million project. The loan has a term of 15 years and the interest rate is the same as the 10-year Treasury note when the funds were issued.

The long-awaited loan, which is $100 million higher than the amount announced early last year, will ensure that Li-Cycle can continue to operate while it works to expand its battery recycling business.

Li-Cycle already has a network of plants in Arizona, Alabama and Ontario that produce black mass - essentially pulverized battery parts - and its Rochester, N.Y., facility, which will break it down into lithium and other metals, will be the only facility of its kind in North America. The plant aims to produce 8,250 metric tons of lithium carbonate per year, as well as 72,000 metric tons of mixed hydroxide precipitates (MHP), which is basically a precursor product containing nickel and cobalt that can be used to make batteries.

Li-Cycle's New York State battery processing plant will become one of the largest sources of the battery metal lithium in the United States, while also cementing a key part of Biden's climate agenda, ensuring that Li-Cycle will receive financial support from the U.S. government no matter what steps the next U.S. president, Donald Trump, takes when he takes office in January. Once a full loan from the U.S. Department of Energy is secured, construction of Li-Cycle's New York State battery processing plant could take 12 to 15 months. "The U.S. Department of Energy plays an important role in supporting a strong domestic supply chain of electric vehicle batteries and critical materials, which is critical to strengthening America's national security and energy security," said Jigar Shah, head of DOE's Loan Program Office, which issued the loan to Li-Cycle.

Li-Cycle's New York State plant is expected to create 825 jobs during construction and 200 permanent jobs after production begins. The plant was supposed to be up and running last year at a cost of about $485 million, but Department of Energy rules requiring loan recipients to use union labor contributed to cost overruns and delays at the plant.

During the review of Li-Cycle's loan applications in the United States, the company largely stalled, with rising inflation preventing the company from moving forward with its business plans. The company's shares have fallen more than 75 per cent in the past year.