Li-Cycle entered into an agreement for a loan facility of up to $475 million (including up to $445 million of principal and up to $30 million in capitalized interest) through the US Department of Energy (DOE) Loan Programs Office’s (LPO) Advanced Technology Vehicles Manufacturing (ATVM) program.

The $475-million loan amount represents an increase of $100 million over the original conditional commitment.

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 US 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.

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 30 September 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.