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Li-Cycle completes commercial agreements with LG Chem and LG Energy Solution; $50M investment; 20,000t of recovered nickel over 10 years

Li-Cycle Holdings Corp. completed commercial agreements with LG Energy Solution, Ltd. for the supply of manufacturing scrap for recycling and with each of LG Energy Solution (LGES) and LG Chem, Ltd. (LGC) for the sale of nickel sulfate from Li-Cycle’s Rochester Hub. With the execution of these agreements, LGC and LGES will now proceed to close the previously announced $50-million investment to purchase common shares of Li-Cycle.

In connection with the commercial arrangements, LGES and LGC have officially recognized Li-Cycle as their preferred lithium-ion battery recycling partner in North America. LGES, LGC and Li-Cycle continue to explore additional opportunities globally.

Li-Cycle, LGC, and LGES have entered into these strategic arrangements to help support the growing global market demand for lithium-ion batteries and their critical materials. The partnership will enable a closed-loop ecosystem for LGC and LGES for key materials in the lithium-ion battery supply chain and will provide further capital to Li-Cycle for its continued global expansion.

Nickel is a key component for the production of lithium-ion batteries. Through a North America Scrap 10-year Offer Agreement, Li-Cycle will have the opportunity to recycle nickel-bearing lithium-ion battery scrap and other lithium-ion battery material from LGES’ North America manufacturing sites.

Additionally, under 10-year Nickel Sulfate Off-Take Agreements with each of LGC and LGES, Li-Cycle will sell a combined initial allocation of 20,000 tonnes of nickel contained in nickel sulphate produced at Li-Cycle’s Hub facility currently under construction in Rochester, New York to LGC and LGES, through its off-take partner, Traxys North America LLC.

Li-Cycle estimates that the nickel sulfate to be sold to LGC and LGES under these arrangements will be enough to produce lithium-ion batteries that can power approximately 300,000 high-performing EVs.

LGC and LGES will each subscribe for an equal number of Common Shares of Li-Cycle, for an aggregate investment of $50 million. The Investment will be split into two tranches:

  1. an initial tranche of 4,416,960 Common Shares, in the aggregate, at a price of $10.00 per share (for an aggregate initial tranche subscription of approximately $44.2 million); and

  2. a second tranche of Common Shares having an aggregate value of approximately $5.8 million, based on the volume-weighted average trading price of Li-Cycle’s Common Shares for the 5-trading days ending immediately prior to 29 April 2022.

The Investment is expected to be completed in full by 13 May 2022.


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