Glencore, headquartered in Switzerland, says it has established a strategic partnership with Toronto-based Li-Cycle Holdings Corp., a leading lithium-ion battery recycler in North America. The company says it will subscribe for convertible debt in Li-Cycle, and Li-Cycle will become a preferred partner for Glencore in the lithium-ion battery recycling sector.
A number of key commercial arrangements will be entered into upon the closing of the subscription:
- procuring feedstock for Li-Cycle spoke facilities and black mass for Li-Cycle’s hub facilities;
- offtake of black mass from Li-Cycle’s Spoke facilities;
- offtake of battery usable end products produced by Li-Cycle;
- offtake of byproducts from Li-Cycle’s facilities; and
- supplying Li-Cycle’s sulfuric acid requirements for its hub facilities.
Glencore says it has been working to establish regional platforms across the world to localize battery raw material supply chains within key regions in a scalable and sustainable manner, enabling a set of key partners to connect to these platforms. It sees Li-Cycle as a key strategic partner in this effort.
Through the strategic partnership with Li-Cycle, Glencore says it will seek to combine primary and recycled battery raw materials to produce battery-grade end products, enabling auto manufacturers to meet their electric vehicle (EV) ambitions while also being able to meet key regulatory directives related to battery raw materials. This will be facilitated through the localization of supply chains and increasing recycled content in battery raw materials over time, the company adds.
In Europe, Glencore says it will work to assess the feasibility of using its existing asset footprint with a view toward repurposing some of its assets, thereby reducing the lead time for achieving industrial-scale production of battery grade-end products.
Additionally, the company says it will explore the production of precursor cathode active material in Europe and potentially North America.
“We are excited to announce this new strategic partnership with Li-Cycle,” Kunal Sinha, head of recycling at Glencore, says. “We both believe that battery recycling will form a key part of the energy transition. 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.”
He continues, “We are united in our ambition to further the energy and mobility transition. 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.”
“We are thrilled to have Glencore as a long-term strategic investor and global commercial partner," says Ajay Kochhar, Li-Cycle co-founder and chief executive officer, says. "Bringing our complementary capabilities together will accelerate the path to a circular economy for critical materials in the lithium-ion battery supply chain. These agreements further secure and diversify our lithium-ion battery supply and feedstock sources, competitively positioning our network expansion in North America and Europe.”
Debbie Simpson, Li-Cycle chief financial officer, adds, “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 five spokes currently in development and our operating needs for the next two years. Once completed, the Glencore investment, together with the previously announced investments by LG Chem Ltd. and LG Energy Solution Ltd. and the investment made by an affiliate of Koch Strategic Platforms, will bring the total new capital we have raised since our August 2021 NYSE listing from key strategic global players in the battery material industry to $350 million.”
Subject to the satisfaction of customary conditions precedent and entry into the key commercial agreements described above, which is expected in the second quarter of 2022, Glencore says it will subscribe for $200 million of convertible debt in Li-Cycle. If Glencore elects to convert during the conversion option period, it would hold an approximate 10 percent equity stake in Li-Cycle.
Also, upon closing, Glencore will have the right to nominate one person to the Li-Cycle board, noting that Sinha will be its nominee.