Canadian battery recycling company, Li-Cycle, has temporarily halted construction on its first US-based battery recycling plant in Rochester, New York. The decision is attributed to increasing construction costs, prompting the company to initiate a comprehensive project review.
Li-Cycle originally anticipated that the total costs for the current project scope would surpass earlier forecasts. In light of these developments, the company’s Board of Directors has made the decision to suspend construction work on the Rochester Hub until the review of the project has been completed.
The company had initially announced the Rochester Hub facility in September 2020, with plans for it to become operational by 2022. During the opening of their Spoke facility in Magdeburg, Germany, Li-Cycle indicated that the Rochester Hub was expected to be commissioned by the end of 2023.
Li-Cycle utilizes a two-stage process for battery recycling. Used batteries and production rejects are mechanically shredded in the spoke facilities, often in proximity to the customer. In this process, the initial raw materials are separated, and the valuable active materials known as the “black mass” are extracted from the batteries. Subsequently, the black mass is separated into individual materials at the hub facilities. An equivalent hub is planned for Europe in Portovesme, Sardinia.
It’s worth noting that while a spoke plant in Rochester is currently operational, the temporary suspension of construction work primarily affects the hub facility. However, without a hub in North America, Li-Cycle’s ability to process the valuable black mass from the spokes would be compromised, a crucial aspect of their profitable battery recycling operation.
The pending review holds significant importance, as it will encompass “an evaluation of the go-forward phasing of its scope and budget, including construction strategy.” Li-Cycle has also expressed its intention to collaborate closely with the US Department of Energy (DOE) regarding the previously announced $375 million loan commitment.
Li-Cycle is set to release its third-quarter earnings report on November 13, which will include “additional updates on the Company’s near-term plans and the project review process.”
