The US Department of Energy said on Monday it would lend $375 million to Li-Cycle Holdings Corp to build a battery recycling facility in New York, which is expected to become one of the biggest sources of lithium in the country by next year.
The loan is the latest move by Washington to spur the development of a national supply chain for electric vehicles, with greater battery recycling capacity seen as crucial to meeting President Joe Biden’s goal of Half of new American vehicles will be electric by 2030.
“One of the benefits of recycling is that it can bring metals to market with more confidence than some of the mining companies that take a bit longer to get from resource identification to full production,” Jigar Shah, head of the Energy Department’s loan programs office, told Reuters.
The loan, which has been in the works for over a year, will have a 12-year term and an interest rate equal to the 10-year US Treasury rate when the funds are issued, which is expected to be here July. U.S. Senator Chuck Schumer, a New York Democrat who serves as Senate Majority Leader, had long advocated for Li-Cycle to receive the funding.
Li-Cycle’s processing facility in Rochester, New York, is expected to open later this year, at a cost of approximately $485 million. Li-Cycle, which counts mining giant Glencore Plc among its major shareholders, has the funds to pay for the Rochester facility, so the loan will help the company expand elsewhere.
“What this does for us is speed up our work even more and open up the option to do other things,” said Ajay Kochhar, chief executive of Li-Cycle.
The company has developed a network of facilities in Arizona, Alabama and Ontario that produce black mass, which is basically shredded battery parts. The Rochester facility will break down this dark mass into lithium and other metals.
Li-Cycle aims to produce 8,500 tons of lithium carbonate per year from the facility when it ramps up in 2024, in what would make it one of the largest U.S. sources of the battery metal.
Last month, the Department of Energy agreed to lend $2 billion to Li-Cycle peer Redwood Materials and $700 million to ioneer Ltd.’s Rhyolite Ridge lithium mining project.
