Automotive News Canada - February 2024 - 13

* FEBRUARY 2024
13
Li-Cycle stalled by costs and funding shortfall
'The dynamics of
the market have
changed significantly
since we opened
the Ontario spoke,'
battery recycler said
By DAVID KENNEDY
T ORONTO BUREAU CHIEF
A CANADIAN COMPANY WITH
sights set on U.S. expansion has
halted construction on a battery
processing plant in Rochester,
N.Y., and laid off all 30 employees
at its Ontario facility in Kingston.
Battery recycler Li-Cycle
Holdings Corp. is looking to cut
expenses and map out a strategy
for completing its New York
" hub " in the face of higher costs.
The Toronto electric-vehicle-battery
recycling startup initiated
a " comprehensive review "
of the Rochester project in late
October and on Nov. 13 reported
that costs for the processing plant
could escalate to US $1 billion
(Cdn $1.35 billion), nearly double
the initial estimate of $560 million
(Cdn $750 million).
" The review is examining
expected capital costs, timing
of completion and go-forward
construction strategy options, "
Li-Cycle CEO Ajay Kochhar told
analysts on a conference call in
November.
Kochhar pointed to higher
installation costs for mechanical
equipment, piping, structural
steel, electrical systems and process
control devices as among the
reasons for the dramatically higher
building costs.
'PRUDENT' PAUSE
Kochhar said the company
made the " prudent " decision to
pause work in
Rochester in
late October
as costs coupled
with
slow-to-materialize
government
funding
were leading to
" lower current
and projected
cash balances. "
Li-Cycle
began construction
on
the plant in
January 2022
and as recently
as late
September reiterated
its plan
to begin commissioning
the
designed to chemically separate
and process lithium, nickel,
cobalt and other critical minerals
from recycled batteries into the
forms ready for reuse in new batteries.
Kochhar:
" The
review
is examining
expected
capital costs,
timing of
completion
and go-forward
construction
strategy
options. "
FILE PHOTO
site by the end of 2023.
The Rochester plant - what
the company calls a " hub " - is
Before this step, Li-Cycle had
set up " spokes " across North
America and Europe to shred
end-of-life batteries and manufacturing
scrap. The resulting mineral-rich
material - black mass
- would then be shipped to New
York for final processing.
But with the Rochester plant
in limbo, the company said it is
slowing operations at its three
U.S. spokes in Alabama, Arizona
and New York, as well as halting
operations outright at its
Kingston processing plant.
" The dynamics of the market
have changed significantly since
we opened the Ontario spoke, "
Louie Diaz, Li-Cycle's vice-president
of marketing and communications,
wrote in an email to
Automotive News Canada.
NEW SITE ON HOLD IN KINGSTON
" This decision is in line with
customer needs and demands
and consistent with our strategy
of focusing on key regions with
large battery markets, " Diaz said.
As of the second week of
February, Li-Cycle operations
were still paused.
The Kingston plant was the
Li-Cycle's Rochester, N.Y., " hub " plant - now on hold - would
take material from batteries recycled at " spoke " plants in the
United States and extract critical minerals for reuse in new
batteries. FILE PHOTO
first built by Li-Cycle and uses
an earlier iteration of its battery-processing
technology, which
requires time-consuming dismantling
and battery discharging.
The company has been planning
a new site that would use its
third-generation recycling technology,
but those plans have been
put on hold, Diaz said.
He would not say when a decision
on the future of Li-Cycle's
Kingston operations would be
made but said all laid-off staff
have been given severance packages
and support finding new
jobs.
Aside from the layoffs in
Ontario, Li-Cycle said it was eliminating
nonessential operational
spending across its network as
well as putting plans for spokes
in France, Norway and Hungary
under review.
The company also looks to complete
an anticipated loan from the
U.S. government that would help
bolster its balance sheet. Li-Cycle
received a conditional commitment
for a $375-million loan from
the Department of Energy in
February 2023 but is still working
to satisfy the conditions required
to close the deal.
Meantime, Li-Cycle announced
that it has hired an independent
firm to evaluate financing
and strategic alternatives as it
reviews its options for completing
the Rochester project. - ANC
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Automotive News Canada - February 2024

Table of Contents for the Digital Edition of Automotive News Canada - February 2024

Automotive News Canada - February 2024 - Intro
Automotive News Canada - February 2024 - CT1
Automotive News Canada - February 2024 - CT2
Automotive News Canada - February 2024 - 1
Automotive News Canada - February 2024 - 2
Automotive News Canada - February 2024 - 3
Automotive News Canada - February 2024 - 4
Automotive News Canada - February 2024 - 5
Automotive News Canada - February 2024 - 6
Automotive News Canada - February 2024 - 7
Automotive News Canada - February 2024 - 8
Automotive News Canada - February 2024 - 9
Automotive News Canada - February 2024 - 10
Automotive News Canada - February 2024 - 11
Automotive News Canada - February 2024 - 12
Automotive News Canada - February 2024 - 13
Automotive News Canada - February 2024 - 14
Automotive News Canada - February 2024 - 15
Automotive News Canada - February 2024 - 16
Automotive News Canada - February 2024 - 17
Automotive News Canada - February 2024 - 18
Automotive News Canada - February 2024 - 19
Automotive News Canada - February 2024 - 20
Automotive News Canada - February 2024 - 21
Automotive News Canada - February 2024 - 22
Automotive News Canada - February 2024 - 23
Automotive News Canada - February 2024 - 24
Automotive News Canada - February 2024 - 25
Automotive News Canada - February 2024 - 26
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