Toronto-based lithium-ion battery recycler Li-Cycle has announced it will proceed with construction to increase processing capacity at its first commercial hub facility in Rochester, New York, in light of the rising volume of scrap in the United States.
The company says it will expand the input processing capacity of the facility by more than 40 percent to 35,000 metric tons of black mass annually, which is equivalent to nearly 90,000 metric tons of lithium-ion batteries annually. Li-Cycle also says the increased capacity will allow the facility to process battery material from the equivalent of about 225,000 electric vehicles (EVs) per year.
The hub will be integrated with Li-Cycle’s existing network of spoke facilities across North America, which will be the primary suppliers of feedstock for the hub. The 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 then transforms the black mass into critical grade materials to be returned 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,” says Li-Cycle President and CEO Ajay Kochhar. “Even with the increased capital investment, we expect the Hub project to deliver highly accretive returns. 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 estimates construction on the hub will be complete by 2023 and will require a total capital investment of approximately $485 million.
The company also has entered into a nonbinding letter of intent with LG Chem (LGC) and LG Energy Solution (LGES), Seoul, South Korea. As part of the proposed partnership, Li-Cycle will recycle nickel-rich battery scrap and other lithium-ion battery materials in the U.S. to create a closed-loop ecosystem. It also will supply both companies with 20,000 metric tons of nickel contained in nickel sulfate from the New York facility over a 10-year period.
LGC and LGES will combine for a $50 million equity investment in Li-Cycle upon completion of the commercial agreements by March 2022.
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