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Li-Cycle and Glencore Form Commercial Partnership for Rochester Hub Products
November 7, 2024
3 Min Read
Li-Cycle
TORONTO --Li-Cycle Holdings Corp. (NYSE: LICY) (“Li-Cycle” or the “Company”), a leading global lithium-ion battery resource recovery company, is pleased to announce that it has entered into an agreement with Glencore Ltd. (“Glencore”) covering the off-take of 100% of the MHP to be produced at its Rochester Hub.
By amending and restating certain of its existing commercial agreements with Glencore and Traxys North America LLC (“Traxys”), the Company has established the commercial framework for the proposed MHP scope for the Rochester Hub project. Glencore and Traxys’ existing off-take rights covering lithium carbonate production from the Rochester Hub are not affected by these amendments.
Under the amended and restated commercial agreements, Glencore has agreed to purchase all of the Company’s MHP production at the Rochester Hub on agreed commercial terms based on market prices for the nickel and cobalt contained within the MHP. The parties have also agreed to extend the scope of the existing off-take agreements to cover material produced for Li-Cycle under tolling agreements with third parties. Traxys will also receive certain payments related to the MHP production for the duration of their off-take agreement, which has been adjusted to take into account the proposed MHP scope for the Rochester Hub. The payment terms and working capital facilities under both the Traxys and Glencore commercial agreements have also been adjusted to align with the requirements of the proposed loan to Li-Cycle under the DOE’s Advanced Technology Vehicles Manufacturing program (“DOE Loan”).
The revised Glencore commercial agreements were completed in parallel with the ongoing effort to finalize the DOE Loan.
Rochester Hub Technical Review
The Company has completed its technical review of the MHP scope for the Rochester Hub. Earlier this year, Li-Cycle confirmed the technical viability of the MHP scope through an internal study, advanced the go-forward execution plan for the Rochester Hub, and refined cost estimates with the local market to evaluate the project’s total cost estimate.
Li-Cycle expects to produce up to approximately 8,250 tonnes of battery-grade lithium carbonate and up to approximately 72,000 tonnes of MHP annually at the Rochester Hub under the MHP scope. The project’s nameplate processing capacity remains at 35,000 tonnes of black mass annually.
The proposed MHP scope is part of the changes to the Rochester Hub’s development strategy to potentially reduce the construction scope. The MHP process that is expected to be deployed at the project was proven in Li-Cycle’s large-scale pilot program, which was completed in 2019-2020, and is included in Li-Cycle’s patented technology portfolio.
Ajay Kochhar, Li-Cycle’s President and CEO, commented: “The amendment to our commercial contracts with Glencore and Traxys and completion of the Rochester Hub project’s technical review are positive steps that support our progress towards finalizing definitive financing documentation for the proposed DOE Loan. Establishing a commercial framework for MHP alongside our existing lithium carbonate off-take agreements provides Li-Cycle with a strong market foundation for the Rochester Hub project.
“We are also pleased to see continued support from Glencore, a key strategic partner and investor. We believe that Glencore’s support indicates its confidence in our technology and our overall Spoke & Hub business model. We also believe our Spoke & Hub Technologies™ will continue to support a sustainable closed-loop battery supply chain and provide value for our customers and stakeholders.”
Kunal Sinha, Global Head of Recycling for Glencore and a member of Li-Cycle’s Board of Directors, commented: “We are pleased to support Li-Cycle’s Rochester Hub plan through an amended commercial framework that will include both lithium carbonate and MHP. Glencore is committed to creating a closed-loop battery materials supply chain and our ongoing partnership with Li-Cycle is a key part of this strategy.”
Additional information regarding this announcement may be found in a Current Report Form 8-K filed with the U.S. Securities and Exchange Commission.
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