September 13, 2021
Original article published in Energy Storage News
Lithium battery recycling company Li-Cycle is planning its fourth facility in North America, the company said, as it made its first financial results release since listing on the New York Stock Exchange (NYSE) in August.
The new plant will be built in Tuscaloosa, Alabama, which Li-Cycle co-founder and executive chairman Tim Johnston said is in response to demand for lithium-ion battery recycling exceeding the company’s expectations. Li-Cycle builds ‘Hub and Spoke’ facilities: lithium batteries are dismantled and turned into ‘black mass’ which contains all their different metals at Spokes and then the black mass is processed at Hubs.
The company has two Spokes already in operation in Kingston, Ontario, and Rochester in Upstate New York and then announced a further Spoke in Arizona in April to meet both supply and demand from the West Coast. Meanwhile it is still developing its first Hub, which will also be in Rochester and is expected to be its major revenue-generator.
The company, founded in Canada in 2016, has only recently gone commercial but now has more than 70 customers, having signed up 14 in its third fiscal quarter of 2021 alone. Its revenues remain modest, but at US$1.7 million for the most recent quarter represent a huge jump of more than 800% since the same quarter in the previous year (US$0.2 million).
In the quarter ending in late July, 524 tonnes of black mass containing 85 tonnes of lithium carbonate equivalent (equivalent to 16 tonnes of lithium metal), 75 tonnes of nickel metal equivalent and 23 tonnes of cobalt metal equivalent came out of its two existing Spokes. The company said that it is confident it can be processing 100,000 tonnes of lithium batteries at Spokes and up to 240,000 tonnes at its Hub by 2025.
Expecting a ‘tsunami’ of end-of-life batteries to begin soon
Li-Cycle is betting, as are many in the battery industry, that recycling will become a big opportunity further down the line and has sought to enter the space early. At the moment the majority of its feedstock comes from the 5% to 10% of assembly line batteries that manufacturers reject, but it is anticipating a “tsunami” of end-of-life batteries to begin in the next couple of years.
Until then, as it detailed ahead of the SPAC merger that gained Li-Cycle the NYSE listing and net proceeds of US$527 million, it will be a question of building up facilities, technologies, competence and partnerships with offtakers and suppliers. The company said in a quarterly results presentation that it sees the many gigawatt-hours of battery factories coming online in the US in the next few years as a huge opportunity.
The company recently told Energy-Storage.news that although electric vehicles (EVs) are the main driver of the lithium battery and battery recycling market in North America, it expects stationary energy storage systems (ESS) to also be significant in the years to come.
Although the past three quarters have resulted in a net loss of US$21.6 million and adjusted EBITDA losses of US$12.6 million, the company’s leadership said business has gone in line with its expectations. During the quarter just gone, in addition to signing up with battery life-cycle management company Renewance to work on recycling solutions for end-of-life ESS, the company signed a deal with Ultim Cells, a JV between General Motors and LG Energy Solution for supply of battery scrap from a factory in Ohio.
Redwood Materials, a battery recycling company led by former Tesla CTO JB Straubel recently raised US$700 million investment towards scaling up its facilities in Nevada and growing the business and its materials recovery and processing technologies. Straubel said that the value of recycled materials is going to quickly catch up with raw materials, since recycled batteries already contain high purity metals.