Li-Cycle Discusses New European Plant, Updates to North American Spoke and Hub

 Lithium-ion battery recycler Li-Cycle provided updates to its spoke and hub network and unveiled plans for a major European recycling hub in collaboration with Glencore during an investor call.

Ajay Kochhar, Li-Cycle president and CEO, noted strong company growth due to various partnerships to drive global expansion. The Toronto-based company has entered various partnerships throughout Europe, which aim to address growing demand for sustainable battery recycling solutions on the continent.

“As we indicated at the end of March, we continue to deliver on our strategic objectives and further Li-Cycle’s position as a leading pure-play resource recovery player in the battery supply chain. In North America, our operational Spokes continue to demonstrate strong production results to provide the future feed to our Rochester Hub, which remains on track to commence commissioning in late 2023,” he stated.

From a commercial standpoint, Li-Cycle expanded commercial relationships, confirmed with global customers and entered a definitive agreement with VinES, a battery manufacturer in Vietnam. In December 2022, Li-Cycle expanded its presence in the Asian market with an office opening in Vietnam.

VinES, the largest battery manufacturer in Vietnam, signed a definitive agreement with Li-Cycle in April 2023.

"From 2024, Li-Cycle will become the strategic and preferred recycling partner for Vietnamese-sourced battery materials of VinES," according to Li-Cycle. "The agreement further contemplates the possible construction of a dedicated Spoke located close to the VinES manufacturing site in Vietnam. An investment decision regarding the dedicated Spoke facility is expected to be made in 2025. In the meantime, Li-Cycle will process VinES material utilizing Li-Cycle’s North American Spoke network."

The company also announced plans for a substantial European recycling hub to be strategically located to serve the European market, which is experiencing rapid growth in electric vehicle (EV) adoption and battery manufacturing.

The collaboration will leverage Glencore's expertise in sourcing and supplying materials critical to the lithium-ion battery supply chain. The Swiss multinational company and Li-Cycle will study the feasibility of and co-development of a facility in Portovesme, Italy to extract critical battery materials including nickel, cobalt, and lithium. 

Commissioning of the Hub is expected to commence in late 2026 to early 2027. The facility will have the capacity to process 50,000 to 70,000 tonnes of black mass on an annual basis.

“Consistent with our strategy, we are extending the modular approach deployed in North America to Europe. With three Spokes in development, supported by numerous commercial contracts, we are excited to proceed with the next step in our strategy of ‘closing the loop'," Kochhar commented. "Building on our strong partnership with Glencore, we plan to jointly study the feasibility of a European Hub that is expected to be the largest source of recycled battery-grade lithium, nickel, and cobalt in the continent. The development plan leverages Glencore’s existing metallurgical site, at Portovesme, in Sardinia, Italy, to process up to 50,000 to 70,000 tonnes of black mass annually, or the equivalent of up to 600,000 electric vehicles.”

Li-Cycle progressed the development of its three European spokes in Germany, France and Norway. The Germany Spoke is slated for commissioning in mid-2023. 

The company also was recently named as a preferred battery recycling partner for forklift and warehouse truck supplier KION. commercial arrangements will begin in France and Germany and will expand globally, stated Tim Johnston, Li-Cycle co-founder and executive chairman.

"France is projected to be one of the largest battery cell manufacturing and end-of-life markets in Europe," he said. "The Gen 3 Spoke will be located in the North of France, an existing building site in Harnes with access to renewable energy in close proximity to three upcoming Gigafactories and several automotive OEM groups. And the Spoke will have an initial processing capacity of 10,000 tons per year with optionality to expand up to 25,000 tons per year."

In North America, the company announced it optimized four North American Spokes "for ‘feed fit’ purposes with solid operating performance." Li-Cycle announced advancements at its Rochester Hub, which it expects to allow storage of Black Mass "towards the back end of '23 and into early '24," according to CFO Debbie Simpson.

"Capital investment to support this Spoke & Hub Network growth is expected to be in the range of $285 million to $345 million with the hub build accounting for approximately $250 million to $300 million of the total and the balance being attributed to the development of our Spoke Network," she said.

Speaking of company performance, Kochhar noted that the company also secured a loan commitment from the US Department of Energy's loan commitment for $375 million, to enhance its "financial flexibility for future network expansion."