A windfall investment for one Canadian cleantech company and a lucrative contract for a second one signify fresh prospects for efforts to recycle and repurpose lithium-ion batteries.
Toronto-based Li-Cycle Holdings, long considered a promising battery recycling start-up, saw a rocky year-end in 2023, having halted its “cornerstone” facility in Rochester, New York, amid budget overshoots and rising construction costs. The pause put in jeopardy US$375 million in conditional funding from the United States Department of Energy (DOE), and the company’s stock price tanked over viability concerns.
But on March 12, Li-Cycle announced it had secured a $75 million cash infusion from Swiss mining giant Glencore, which in 2022 had already staked $200 million in the company. Li-Cycle shares jumped 33% that day, reported Reuters.
“We are excited to work with Glencore to close the interim financing,” CEO Ajay Kochhar said on a recent investor call, adding that Li-Cycle was also working to make progress on the DOE loan. The company is trying to drive down costs, support key customers and, finally, to complete its analysis of a “go-forward approach” for the Rochester recycling hub, he added.
Some onlookers do remain skeptical about the company’s outlook, with one analyst suggesting its finances are “in dire straits,” reported WXXI News.
Pointing out that Li-Cycle used half its cash on hand in 2023’s final three months while posting a $138-million loss for the year, Ethan Wade, senior vice president and chief development officer at Brighton Securities, called it “a meaningful discrepancy.” Such a big loss—against only $18 million in sales—“is significant,” he said.
Wade pointed to key sections of Li-Cycle’s most recent filings to infer that the company would gradually introduce the idea that it’s not coming back to the Rochester facility. “They have to start kind of breaking it lightly to the market,” he suggested.
A Li-Cycle spokesperson maintained the company’s “priority is to restart construction and develop the Rochester hub.” Li-Cycle recently increased the facility’s cost estimate to $960 million, saying it had refined its budgeting methodology, reported mining.com. In November, it had placed the cost at between $850 million and $1 billion, up from an earlier $560-million estimate.
This wobbly rebound takes place amid global momentum for a clean energy transition, with battery recycling a critical part of the effort to minimize the environmental impact of battery metal mining.
Some of that impact can also be offset by second-life batteries, which will be central to supporting the integration of renewables into the energy mix. Often sourced from electric vehicles, second-life batteries are repurposed from their original into stationary energy storage, using the 70-80% of their original capacity that they retain. Wind and solar installations can reuse these batteries for energy storage before they eventually end up being recycled—an intermediate step that can deliver a lot of market value, according to McKinsey & Company.
Coquitlam, British Columbia-based Moment Energy repurposes used batteries from automakers like Mercedes Benz and Nissan by stacking them in rechargeable energy storage systems. The company recently secured a C$800,000 contract to build a battery energy storage system for the Vancouver International Airport’s EV fleet, reported Business in Vancouver.
“When we repurpose, we’re actually allowing recyclers more time to develop their technologies so that, five, ten years from now, when they get the batteries from second life, it will be a more profitable and sustainable process,” said Moment Energy co-founder and COO Sumreen Rattan.
