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Li-Cycle stock surges on $75 million investment from Glencore

Lithium-ion battery resource recovery company Li-Cycle (NYSE: LICY) announced Tuesday it raised $75 million through a senior note financing with an affiliate of Swiss commodities giant Glencore (LON: GLEN).

Glencore last year said it planned to develop a recycling hub in Europe with Canada’s  Li-Cycle Holdings to produce materials, including lithium carbonate, to respond to a global shortage of key raw materials for a fast growing production of electric cars.

This not the first investment Glencore made with the company. In June 2022, it invested $200 million in Li-Cycle. CEO Ajay Kochhar said at the time that the agreements would “further secure and diversify” the company’s lithium-ion battery supply and feedstock sources and help improve its position in North America and Europe.  

The demand for lithium-ion batteries, used in electric vehicles (EV), has been on the rise, as the world looks to meet its goal of transitioning away from fossil fuels by 2050. The recycling of lithium-ion batteries, however, is not expected to take off before 2030 due to obstacles such as the lack of recyclable feedstock and the long life of EVs, according to Wood Mackenzie. 

“This financing enhances Li-Cycle and Glencore’s existing long-term, strategic partnership and represents an interim step in our funding strategy to support Li-Cycle’s future plans,” Ajay Kochhar, Li-Cycle co-founder and CEO said in a news release. “We also continue to work closely with the U.S. Department of Energy on the conditional commitment for a loan of up to $375 million.”

Li-Cycle said it is continuing to review its global recycling network and its go-forward strategy for the paused Rochester Hub in the US, including analyzing potential end-product mix options and construction strategy.

 “Glencore is committed to bringing scalable and sustainable circularity into the supply chain of battery materials,” Kunal Sinha, Glencore’s Global Head of Recycling and non-executive director of Li-Cycle’s Board said in the statement.

“Our original investment in Li-Cycle, alongside key commercial agreements, formed part of this strategy. Today, we are pleased to further support Li-Cycle through this additional $75 million investment so both Li-Cycle and Glencore can continue to build the battery circularity platform of choice for our customers.”

Li-Cycle’s stock surged over 38% in Tuesday afternoon trading in New York. By 2pm EDT the shares had been traded 51,617,600 times, compared to an average volume of 3,323,515. The company has a $97.8 million market capitalization.

Source: MINING.COM – Read More