The Canadian battery recycler Li-Cycle has concluded a still non-binding memorandum of understanding with the South Korean chemical group LG Chem and its battery division LG Energy Solution for the supply of scrap from battery production and complete lithium-ion batteries for recycling as well as for the purchase of nickel.
Upon completion of the final agreement, LGC and LGES will make a combined investment of US$50 million (€44.3 million) in Li-Cycle. Specifically, Li-Cycle will recycle battery materials from LG Energy Solution and supply LG Chem and LG Energy Solution with 20,000 tonnes of nickel over a ten-year period starting in 2023 – enough for approximately 300,000 electric vehicles.
LG Chem and LGES will split the investment exactly 50/50, according to your joint announcement from all three companies. In another announcement, Li-Cycle already announced where some of the money will be invested: The first battery recycling plant in the US, which is currently under construction, is to be expanded by more than 40 per cent. The plant in Rochester in the US state of New York will now be designed for a processing capacity of 35,000 tonnes of ‘black mass’ per year. This should enable the plant to process battery material equivalent to about 225,000 electric vehicles per year, Li-Cycle said.
In total, the company estimates that the Rochester recycling hub will require $485 million in capital expenditure, with the addition of +/- 15 per cent. This should be able to be financed from existing cash on the balance sheet. However, Li-Cycle itself expects to “explore various options to optimise its capital structure, such as potential loans from government-related institutions”.
The hub in Rochester occupies a central role in Li-Cycle’s structure: The company has already announced four ‘spoke’ plants. These ‘spokes’ process the spent batteries and scrap from battery manufacturing into the ‘black mass’. This “black mass” is then transported to the “hub” and processed there. So in the ‘Spoke’ plants – such as ‘Spoke 4’ in Tuscaloosa near the Daimler plant – only the crushing and sorting takes place, while the recycling of the valuable battery materials is carried out in Rochester.
“Sustainable recycling for lithium-ion batteries is critical to the electrification revolution,” says Byungchul Choi, LGC battery materials development department manager. “Li-Cycle is making economically and environmentally sustainable lithium-ion battery recycling a commercial reality through its innovate technologies.”
“This proposed commercial arrangement with LGES and LGC and related strategic investment further enhance our global growth strategy as we continue to scale our safe, efficient, and sustainable lithium-ion recycling technologies,” said Ajay Kochhar, co-founder and CEO of Li-Cycle.
The cooperation with LG Chem and LGES is not the first contact with the South Korean group for Li-Cycle: Already in May, a recycling agreement was concluded with Ultium Cells, the joint venture of General Motors and LGES.
businesswire.com (combined announcement), businesswire.com (Li-Cycle announcement)
Keyword: Li-Cycle and LG enter into recycling and nickel agreement