Li-Cycle interrupts construction of US recycling plant
The company assumes that the total costs for the current scope of the project will exceed previous forecasts. In light of these developments, the Board of Directors has decided to suspend construction work on the Rochester Hub until a review of the project has been completed.
Li-Cycle announced the Rochester Hub facility in September 2020 and planned for it to be operational by 2022. At the opening of the Spoke facility in Magdeburg, Germany, the company mentioned that the former would be commissioned by the end of 2023.
Li-Cycle relies on a two-stage process. Used batteries and production rejects are mechanically shredded in the spokes (in some cases close to the customer). The first raw materials are separated, and the so-called black mass containing the battery’s valuable active materials is extracted. The black mass is then separated into the individual materials in the hubs. Such a hub is planned for Europe in Portovesme in Sardinia.
A spoke plant in Rochester is already up and running, and the temporary halt in construction work only affects the hub plant. However, it is also clear that without a hub in North America, Li-Cycle will not be able to process the black mass from the spokes itself. And this is precisely the profitable part of battery recycling.
The inspection now has an enormously important role to play. The review will also include “an evaluation of the go-forward phasing of its scope and budget, including construction strategy.” In this context, Li-Cycle intends “to work closely with the US Department of Energy (DOE) with respect to the previously announced $375 million loan commitment.”
Li-Cycle will present its third-quarter earnings report on November 13. It will include “additional updates on the Company’s near-term plans and the project review process.”