Li-Cycle Closes Upsized $475 Million Loan Facility with US Department of Energy to Support Development of the Rochester Hub Project
- $475 million loan amount represents an increase of $100 million over the original conditional commitment
- First DOE loan facility to be finalized for a battery resource recovery facility and sustainable lithium-ion battery materials recycling company
- Agreement represents affirmation of Li-Cycle’s sustainable Spoke & Hub Technologies™ and the Company’s position as a leading supplier of recycled critical materials for lithium-ion batteries
TORONTO, ONTARIO (November 7, 2024) – Li-Cycle Holdings Corp. (NYSE: LICY) (“Li-Cycle” or the “Company”), a leading global lithium-ion battery resource recovery company, is pleased to announce that it has entered into an agreement for a loan facility (“DOE Loan Facility”) of up to $475 million (including up to $445 million of principal and up to $30 million in capitalized interest) through the U.S. Department of Energy (“DOE”) Loan Programs Office’s (“LPO”) Advanced Technology Vehicles Manufacturing (“ATVM”) program.
This is the first DOE loan facility to be finalized for a lithium-ion battery materials recycling company, which further demonstrates Li-Cycle’s important role in the U.S. battery materials supply chain as a domestic supplier of recycled critical battery materials.
The entry by Li-Cycle into definitive documentation with the DOE follows the DOE’s detailed technical, market, financial and legal due diligence. The DOE Loan Facility is expected to support the development of the Company’s flagship Rochester Hub project, located in upstate New York.
[2] The Loan Facility reserve accounts required for First Advance includes reserves for project construction, project ramp-up, and Spoke capital expenditures. Funding of these reserve accounts does not constitute capital expenditure on the project and the requirement to fund these reserve accounts is in addition to the total capital cost of the Rochester Hub project through to mechanical completion. The majority of these reserve account funds are expected to be released to the Company on or before the completion of the Rochester Hub project.
The Company expects the Rochester Hub to be North America’s first commercial hydrometallurgical resource recovery facility and a significant domestic source of recycled critical materials for producing lithium-ion batteries, including battery-grade lithium carbonate and mixed hydroxide precipitate (“MHP”). MHP is an intermediate product containing nickel, cobalt, and manganese metals.
Once the Rochester Hub is fully operational, Li-Cycle expects to produce up to approximately 8,250 tonnes of lithium carbonate and up to approximately 72,000 tonnes of MHP per year at the Rochester Hub under the MHP scope. The planned nameplate processing capacity at the Rochester Hub remains at 35,000 tonnes of black mass per year. The Rochester Hub project is expected to create approximately 825 construction jobs at peak construction and more than 200 permanent jobs.
The Company estimates the total capital cost of the Rochester Hub project through to mechanical completion to be approximately $960 million, of which the remaining estimated cost to complete (“CTC”) the project is approximately $487 million. The CTC includes commitments related to the project for costs incurred but not yet paid (approximately $92 million as of September 30, 2024). The total capital cost for the Rochester Hub project through to mechanical completion excludes costs for project commissioning, ramp-up, working capital or financing. The Company is actively exploring financing and strategic alternatives for a complete funding package needed to restart the construction of the Rochester Hub (of which the DOE Loan Facility is a key component) and for general corporate purposes. The funding package would assist in satisfying the funding conditions for First Advance under the DOE Loan Facility, including funding the remaining BEC (which includes the reserve account requirements) and a minimum cash balance.
Ajay Kochhar, Li-Cycle President and CEO, commented:
Throughout 2024, one of Li-Cycle’s primary objectives has been to finalize negotiations with the DOE in order to enter into definitive documentation to obtain a DOE loan.
“Today, we are excited to announce our achievement of this significant milestone, which we believe represents a strong vote of confidence in Li-Cycle’s patented and environmentally friendly recycling technology and business model. Securing the DOE Loan Facility through our close collaboration with the DOE is a critical step toward our goal of restarting construction at the Rochester Hub project.
We believe that the DOE Loan Facility offers attractive terms relative to other third-party financing alternatives available to us. We believe it will also enhance our financial flexibility and support our mission to create a sustainable, closed-loop battery supply chain, which is vital to the electrification transition and securing energy independence in North America.
Additional information regarding this announcement may be found in a Current Report Form 8-K filed with the U.S. Securities and Exchange Commission.
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Li-Cycle Closes Upsized $475 Million Loan Facility with US Department of Energy to Support Development of the Rochester Hub Project, source
