Battery recycler Li-Cycle considers producing lithium carbonate and MHP under financial strain

Lithium-ion battery recycling player Li-Cycle provided 2023 earnings and a business update on 19 March 2024. The company reported an increase in black mass production to 6,825 tonnes in 2023, and the financial losses widened to US$166.4 million.

The company has multiple black mass producing "Spokes" and processing "Hubs" in operation or construction across Europe and North America. It initiated a pause and reevaluation of its Rochester Hub construction in the United States last year.

According to the latest update, Li-Cycle decides to set aside the plan of turning black mass to nickel sulphate and cobalt sulphate production in the Rochester Hub, instead considering lithium carbonate and Mixed Hydroxide Precipitate (MHP) production. Management confirms the technical viability of this shift and asserts that it will not significantly affect the project's timeline that remains unclear to the public.

In its future outlook, Li-Cycle expects to recycle more Lithium Iron Phosphate (LFP) batteries in European market. While in the near term, multiple spokes' operation has been slowed or under review.

The company announced Glencore's US$75 million investment on 18 March, and the communication with the U.S. Department of Energy (DOE) is ongoing regarding a conditional loan of up to US$375 million. In a challenging time for lithium chemical and black mass producer, to realise the vision of Rochester Hub, even the revised one, Li-Cycle still needs to explore more financing strategies.

Author: Hongqiu Su | Battery Metals Analyst Associate | London Office, Shanghai Metals Market

Email: lilysu@smm.cn