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“Given that black mass produced by various suppliers, including Li-Cycle, has varying quality and metal concentrations, the material will be a non-standard product,” Ajay Kochhar, co-founder and chief executive officer of Li-Cycle, told Fastmarkets.
“Pricing is typically based on the ni[ckel] and co[balt] content in individual production runs or lots. Where there could be some standardization potentially is a benchmark for this pricing. The product itself will never have a common standard, as various refining processes will be sensitive to different impurities,” Kochhar said.
Fastmarkets’ lithium, cobalt and LME nickel prices could be the basis to price a standardized type of EV battery, for example, according to an analysis by Fastmarkets’ research team.
Meanwhile, Toronto-based Li-Cycle is looking to address the variability of battery technology through innovative technology.
“Depending on the market and regional customers, black mass output from these different sites will not be identical,” Kochhar said. “Hence at the Hub, a hydrometallurgical facility Li-Cycle is currently building in Rochester, New York, we have taken an approach to build a flexible system that can accommodate this variability in black mass composition from our Spokes and third parties.”
The Rochester plant will be the first commercial hydrometallurgical battery resource recovery facility and the first new significant source of battery-grade lithium carbonate production in North America, according to Kochhar. It is on track to commence commissioning in stages in 2023.
Li-Cycle is expecting to see a boost to its business from the recently passed Inflation Reduction Act (IRA).
“[The IRA] will be an accelerator of battery recycling and will positively impact our business both directly and indirectly. Recyclers are eligible for production tax credits of 10% for the costs of producing critical minerals and 30% investment tax credits for developing clean energy facilities in the US. We believe that these credits will reduce the cost of building new facilities to produce domestic critical battery grade materials through recycling,” said Kochhar.
This should also boost the US’ position vis-à-vis China, which has soared ahead in the production and recycling of EV batteries.
“The scale up of gigafactories in North America and Europe will increase the availability of recyclable material, thus enabling an increase in supply of secondary lithium products,” Kochhar said.
“China has been the market leader based on the availability of material for recycling from manufacturing scrap and deployed vehicles being far ahead the US and European markets. Given the increased investment in battery and EV production now in US and Europe, recycling assets will follow as they become a necessary part of the infrastructure to sustainably deploy EVs.”
The IRA also requires domestic production in order to achieve some of its tax benefits, which should boost automakers’ use of US material further.
Li-Cycle reported challenging third quarter earnings, but also said its expansion plans remain largely on track despite short-term slowdowns.
Li-Cycle’s process is among the most energy and environmentally friendly. “In comparison to competitors using thermal processing or ‘smelting,’ Li-Cycle has a unique low-temperature, wet chemistry processing approach,” said Kochhar.
“High temperatures create toxic emissions, and some key materials – like lithium, cobalt, nickel – are often burned off and lost in the [smelting] process. However, Li-Cycle’s wet chemistry approach recovers up to 95% of all critical materials.”
This will also become key while the world runs out of these critical materials that can only be extracted through carbon-intensive mining.
In our recent video interview with Elewout Depicker, vice president commercial and corporate development for Li-Cycle, he explained the most significant barriers to battery recycling as well as what the industry can do to advance these processes. You can watch the full video or read the key takeaways in the article here.