Toronto’s battery recycler Li-Cycle Holdings Corp is receiving a $200 million injection from Switzerland-based Glencore Plc as it looks to expand supply of battery metals for the electric vehicle (EV) industry.
Switzerland-based Glencore’s investment is convertible to equity at $9.95 per share, roughly 38% higher than Li-Cycle’s stock closing price on Wednesday. Glencore will also have a seat on Li-Cycle’s board and has agreed to a standstill agreement, which prohibits unsolicited takeover offers, according to a Reuters report.
. “This is a key step in establishing a strong long-term foundation for the vertical integration of the battery materials supply chain. Together, we will be expanding the spectrum of battery material supply solutions to a broader global customer base, particularly in Europe and North America,” said Kunal Sinha, Head of Recycling at Glencore.
Recycling has considerable potential as a source of EV minerals. For example, U.S. President Joe Biden’s administration has earmarked $3 billion in part to finance EV battery recycling.
Launched in 2016 in Canada by Ajay Kochhar and Tim Johnston , Li-Cycle shreds used batteries and uses a water-based system to start breaking down the batteries. The technique, known as hydrometallurgical machining, uses less energy than other techniques, the company claims. Li-Cycle sends a substance known as black mass from the spoke facilities to the central facilities for further processing. At the facilities it breaks down the black mass into a variety of materials, including those that can be used to make new lithium-ion batteries.
Li-Cycle is building several recycling facilities around North America. The Glencore investment will be used by Li-Cycle for those projects and other corporate purposes.
Glencore will supply Li-Cycle black mass as well as manufacturing scrap, giving Li-Cycle access to more feedstock to recycle.
The deal is set to close by July. LG Chem Ltd and privately held Koch Industries Inc are also investors in Li-Cycle.