Li-Cycle Holdings Corp. (LICY-N) will be supplying thousands of tonnes of lithium-ion battery materials from its planned recycling operations in Rochester, N.Y. to global mining company Glencore PLC (GLNCY).

An offtake agreement has been established, where Barr, Switzerland-headquartered Glencore will take battery-grade lithium carbonate and a blend of metals called mixed hydroxide precipitate (MHP) from Li-Cycle. All of the nickel and cobalt in the MHP will be sold to Glencore on market terms, a release stated.

After a difficult 2023 and 2024, beset by a delay of construction on its keystone Rochester Hub project, layoffs and adjustments to its international plans, the Toronto-based battery recycling company is looking for a restart.

Due to the Rochester setback, Li-Cycle opted to build the facility in stages, producing MHP in the interim. An internal review to verify the viability of such a plan was completed, and was confirmed to be possible, with the project estimated to cost $960 million (all figures US). Li-Cycle expects to produce approximately 8,250 tonnes of lithium carbonate and up to 72,000 tonnes of MHP per year under its current design, as well as 35,000 tonnes of shredded batteries called black mass as per the initial plan.

“Establishing a commercial framework for MHP alongside our existing lithium carbonate offtake agreements provides Li-Cycle with a strong market foundation for the Rochester Hub project,” Ajay Kochhar, Li-Cycle’s president and CEO, said in the release.

Li-Cycle’s agreement with mining firms, DoE

The deal with Glencore, which has invested hundreds of millions of dollars into Li-Cycle to date, will mean amending Li-Cycle’s agreements with both Glencore and another mining company, New York City-headquartered Traxys North America.

Li-Cycle has offtake and marketing agreements with Traxys dating to 2020 for products such as lithium carbonate and nickel sulphate.

Traxys, Li-Cycle said, will receive “certain payments related to the MHP production for the duration of their offtake agreement,” which has been adjusted from the proposed MHP scope for the Rochester Hub.

The changes to the offtake agreements for lithium carbonate production are not affected however, Li-Cycle said.

The payment terms and working capital facilities for both commercial agreements have also been adjusted to match the needs of a proposed $375-million loan from the U.S. Department of Energy (DoE) that would facilitate a restart of construction at the Rochester Hub.

Kochhar said the amendments to its contracts and completing the technical review of the Rochester Hub are positive steps to finalizing the definitive financing documentation for the proposed DoE loan.

“We are pleased to support Li-Cycle’s Rochester Hub plan through an amended commercial framework that will include both lithium carbonate and MHP,” Kunal Sinha, global head of recycling for Glencore and a board member of Li-Cycle, said. “Glencore is committed to creating a closed-loop battery materials supply chain and our ongoing partnership with Li-Cycle is a key part of this strategy.”

Li-Cycle shares were up over 14 per cent to $2.35 as of 11 a.m. EDT Thursday.

About Li-Cycle

Li-Cycle is behind a Spoke & Hub model to recover valuable metals from batteries. At its "Spoke” sites, batteries are recycled to produce black mass. At its "Hubs," the black mass is converted into battery-grade materials to be reused in new batteries.

Such a recycling process can recover up to 95 per cent of the waste materials from used lithium-ion batteries while producing 70 per cent less carbon emissions compared to traditional means, the company claims.

The company has operating Spokes in Arizona, Alabama, New York and Germany. Expectations for Hubs in Italy, France and Norway were put on hold due to the company’s financial struggles.