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Li-Cycle to upsize its capacity at its hub facility to meet demand for battery recycling

TORONTO — Li-Cycle Holdings Corp., a North American company involved in lithium-ion battery resource recovery, announced that it will proceed with the construction of its first commercial Hub facility, which is being developed within the Eastman Business Park near Rochester, New York.

In view of a reportedly growing demand for lithium-ion battery recycling, Li-Cycle will increase the input processing capacity of the Hub by over 40%, from 25,000 tonnes to 35,000 tonnes of “black mass” annually (equivalent to approximately 90,000 tonnes of lithium-ion battery equivalent feed annually).

The Company estimates that the Hub will require a total capital investment of approximately $485 million (+/-15%), which can be funded from existing balance sheet cash. Li-Cycle also expects to explore various opportunities to optimize its capital structure, for example, with potential credit from government-related institutions.

The Hub will be fully integrated with Li-Cycle’s existing network of Spoke facilities across North America. Li-Cycle’s Spoke facilities take in end-of-life batteries and battery manufacturing scrap to produce “black mass”, an intermediate product containing valuable metals such as nickel, cobalt and lithium. The Hub will transform that black mass into critical battery grade materials to be returned back to the lithium-ion battery supply chain.

“We believe the upsizing of our commercial Hub facility is timely, to capture growth from heightened demand with the mainstreaming of electrification in North America driving significant new battery megafactory deployments. Even with the increased capital investment, we expect the Hub project to deliver highly accretive returns,” said Li-Cycle’s President, CEO, and co-founder, Ajay Kochhar. “This is an exciting time for Li-Cycle as we advance the strategic execution on our integrated Spoke & Hub network and enable critical commercial solutions to the growing needs for domestic supply of battery materials in North America.”

Li-Cycle, LG Chem, Ltd. and LG Energy Solution, Ltd. have also entered into a manufacturing scrap supply and nickel sulphate off-take agreement non-binding letter of intent. With this proposed collaboration, LGES and Li-Cycle intend to cooperate on recycling nickel-bearing lithium-ion battery scrap and certain other lithium-ion battery materials to create a closed-loop ecosystem. Over a ten-year period, beginning in 2023, Li-Cycle will supply LGES and LGC with 20,000 tonnes of nickel contained in nickel sulphate from our Rochester Hub facility.

Concurrently with the entering into of definitive commercial agreements for such collaboration, LGC and LGES together will make a $50 million equity investment in Li-Cycle at a price of $11.32/per common share, upon completion of the commercial agreements by March 13, 2022.