Li-Cycle secures 100 percent offtake agreement with Glencore for MHP

Lithium-ion battery recycler Li-Cycle Holdings Corp., Toronto, has entered into an agreement with Switzerland-based Glencore Ltd. covering the offtake of 100 percent of the mixed hydroxide precipitate (MHP) that would be produced at Li-Cycle’s long-stalled Rochester Hub facility in New York.

The Rochester Hub project was paused more than a year ago because of rising construction costs, and Li-Cycle has continued to work on a review process to determine a go-forward strategy for the facility. The company has said it expects the project to cost $960 million.

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By amending and restating certain of its existing commercial agreements with Glencore and New York-based Traxys North America LLC, Li-Cycle says it has established the commercial framework for the proposed MHP score for Rochester. Glencore and Traxys’ existing offtake rights covering lithium carbonate production from the facility would not be affected by these amendments.

Under the restated commercial agreements, Glencore has agreed to purchase all of Li-Cycle’s MHP production at the Rochester facility on agreed commercial terms based on market prices for the nickel and cobalt contained within the MHP. The companies say they also have agreed to extend the scope of the existing offtake agreements to cover material produced for Li-Cycle under tolling agreements with third parties.

“We are pleased to support Li-Cycle’s Rochester Hub plan through an amended commercial framework that will include both lithium carbonate and MHP,” says Kunal Sinha, global head of recycling for Glencore and a member of Li-Cycle’s board of directors. “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.”

Traxys also will receive certain payments related to MHP production for the duration of its offtake agreement, which Li-Cycle says has been adjusted to consider the proposed MHP scope for the Rochester Hub. Li-Cycle adds that the payment terms and working capital facilities under both the Traxys and Glencore commercial agreements also have been adjusted to align with the requirements of the proposed $375 million loan to Li-Cycle under the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing program. The revised Glencore commercial agreements have been completed in parallel with the ongoing effort to finalize the DOE loan.

Additionally, Li-Cycle has completed its technical review of the MHP scope for the Rochester Hub. Earlier this year, the company confirmed the technical viability of the MHP scope through its internal study, advanced its go-forward plan for the Rochester facility 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 tons of battery-grade lithium carbonate and up to approximately 72,000 tons of MHP annually at the Rochester Hub under the MHP scope. The project’s nameplate processing capacity remains at 35,000 tons of black mass annually.

“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,” Li-Cycle President and CEO Ajay Kochhar says. “Establishing a commercial framework for MHP alongside our existing lithium carbonate offtake agreements provides Li-Cycle with a strong market foundation for its 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.”