Li-Cycle, LG Chem, and LGES sign LOI for close loop commercial agreement
Li-Cycle Holdings Corp. has announced that it has entered into a manufacturing scrap supply and nickel sulphate off-take agreement letter of intent with LG Chem, Ltd., and LG Energy Solution, Ltd.
Upon execution of the definitive commercial agreement related to the proposed supply and off-take arrangements, LGC and LGES will together make a $50 million investment to purchase common shares of Li-Cycle, (each making a $25 million investment), according to the terms of definitive subscription agreements effective today.
Upon the execution of the definitive agreement, Li-Cycle, through its end-product off-take partner for the Rochester Hub, Traxys North America LLC, will sell 20,000 tonnes of nickel contained in nickel sulphate produced by Li-Cycle to LGC and LGES over 10 years, beginning in 2023. Additionally, LGES and Li-Cycle intend to cooperate on recycling nickel-bearing lithium-ion battery scrap and certain other lithium-ion battery materials to create a closed-loop ecosystem. Nickel is essential for producing many types of EV batteries. Li-Cycle estimates that the amount of nickel that LGC and LGES plan to procure from Li-Cycle will be enough to produce lithium-ion batteries to power approximately 300,000 high-performing EVs.
"This proposed commercial arrangement with LGES and LGC and related strategic investment further enhance our global growth strategy as we continue to scale our safe, efficient and sustainable lithium-ion recycling technologies," said Ajay Kochhar, co-founder and Chief Executive Officer of Li-Cycle.
"We are excited to collaborate with industry leaders LGES and LGC on a closed-loop arrangement to recycle nickel-bearing lithium-ion battery materials and supply their battery manufacturing plants with recycled nickel battery-grade product. We look forward to continuing to collaborate closely as we transform lithium-ion batteries into a truly circular and sustainable product."
"Sustainable recycling for lithium-ion batteries is critical to the electrification revolution. Li-Cycle is making economically and environmentally sustainable lithium-ion battery recycling a commercial reality through its innovative technologies," said Byungchul Choi, department leader of LGC battery materials development.
"As a leading global battery materials manufacturer, LGC looks forward to executing on this strategic arrangement with Li-Cycle, including the supply of recycled nickel from Li-Cycle to LGC. This exciting investment and commercial arrangement demonstrate LGC's strong commitment to ESG principles."
"We believe LG Energy Solution's commitment to bringing more sustainable solutions for a greener world can be realized through this collaboration with Li-Cycle," said Hyuksung Chung, leader of LGES Corporate Strategy Group.
"We are thrilled to join forces with Li-Cycle on the supply of nickel-bearing lithium-ion battery materials that require recycling and off-take for use in new battery cells for EVs. LGES and Li-Cycle are truly making the circular economy a reality for lithium-ion batteries."