Li-Cycle Secures US$475 Million Loan from U.S. Department of Energy for Rochester Hub Project

Lithium-ion battery (LIB) recycler Li-Cycle Holdings Corp., based in Toronto, has entered into an agreement for a loan of up to US$475 million from the U.S. Department of Energy (DOE). The loan consists of up to $445 million in principal and up to $30 million in capitalized interest and is being provided through the DOE's Advanced Technology Vehicles Manufacturing (ATVM) program.

This loan marks the first DOE loan facility finalized for a LIB materials recycling company, further positioning Li-Cycle as a critical player in the U.S. battery materials supply chain. The agreement follows extensive due diligence by the DOE, including technical, market, financial, and legal assessments. The final loan amount also exceeds the initial selection made in early 2023 by $100 million, underscoring the project's strategic value.

The DOE loan is intended to support the development of Li-Cycle's flagship Rochester Hub project in New York, which has been on hold for over a year due to surging construction costs. Once operational, the Rochester Hub is expected to be North America’s first commercial hydrometallurgical resource recovery facility. It will serve as a significant domestic source of recycled critical materials for producing LIBs, including battery-grade lithium carbonate and mixed hydroxide precipitate (MHP)—an intermediate product containing nickel, cobalt, and manganese.

The company has also recently secured a 100 percent offtake agreement with its long-time partner Glencore for all MHP produced at the facility. Once fully operational, Li-Cycle expects the Rochester Hub to produce up to 8,250 tons of lithium carbonate and approximately 72,000 tons of MHP annually. The facility's planned processing capacity remains at 35,000 tons of black mass per year, and the project is expected to create about 825 construction jobs and more than 200 permanent positions.

The total estimated capital cost for the Rochester Hub project through to mechanical completion is approximately US$960 million, with about $487 million in costs remaining to complete the project. These costs include incurred but unpaid project commitments, estimated at around $92 million as of September 30. Li-Cycle is actively seeking additional financing to restart construction of the Rochester facility and support general corporate purposes.

Ajay Kochhar, President and CEO of Li-Cycle, stated: "Throughout 2024, one of Li-Cycle’s primary objectives has been to finalize negotiations with the DOE to secure a loan. Today, we are thrilled to announce this significant milestone, which we believe demonstrates strong confidence in Li-Cycle’s patented, environmentally friendly recycling technology and business model. Securing this DOE loan facility is a critical step toward restarting construction at the Rochester Hub project."

Kochhar added, "We believe that the DOE loan facility offers attractive terms compared to other third-party financing options available to us. This loan will enhance our financial flexibility and support our mission to create a sustainable, closed-loop battery supply chain, which is crucial for the electrification transition and securing energy independence in North America."