GM’s partner Li-Cycle Holdings Corp, which inked a deal in January 2022 to help at the new Ultium Cells plant in Warren, Ohio with materials recycling, has just secured a $375 million loan from the U.S. government. It will use the money to help construct a major electric vehicle battery recycling facility in New York State.
Li-Cycle will receive the funds from the U.S. Energy Department according to a statement from that agency, Reuters reports. Funding the project with a loan is part of the administration’s push to strongly develop the domestic American supply chain for EVs. Senate majority leader Chuck Schumer (D-NY) has been a longtime proponent of giving Li-Cycle a loan.
Li-Cycle’s Rochester, New York facility will be operational later in 2023 and is expected to become one of the biggest sources of lithium in the U.S. by 2024, producing close to 9,400 tons of lithium carbonate annually. The Energy Department says providing loans to battery recyclers helps to increase battery material supply faster than loans to mining companies, which can have a lengthy mineral exploration and mine development process.
The $485 million needed to build the Rochester recycling plant is already in Li-Cycle’s possession, so the loan will be used for different expansion plans. These will likely include more supporting facilities that render batteries down to “black mass” in preparation for lithium extraction and recovery of other materials.
Interest on the loan will equal the 10-year treasury rate when the funds are issued, probably July 2023. The current treasury rate is 3.92 percent, with the rate trending generally upward. The loan is one of several large federal loans to battery recycling and mining companies.
GM began forging an alliance with Li-Cycle in May 2021. At that time, Li-Cycle entered a partnership with Ultium Cells LLC, the battery manufacturing joint venture between The General and LG Energy Solution. The partnership had 100 percent recycling of scrap cobalt, nickel, lithium, graphite, copper, manganese and aluminum accumulated during manufacturing of GM Ultium batteries.
GM followed up in August 2021 with a dedicated website educating the public on how to recycle EV batteries, featuring the recyclemybattery.com website. The partnership with Li-Cycle began a new chapter with January 2022 plans to construct a Li-Cycle battery recycling plant immediately adjacent to the Ultium Cells facility in Warren, Ohio.
The U.S. government’s loan to Li-Cycle follows a $200 million investment by Swiss multinational commodity trading and mining company Glencore. The funds may also go to expanding the network of Li-Cycle battery shredding facilities feeding black mass to the main recovery and recycling plant in Rochester.