Li-Cycle more than doubles production of black mass in first quarter

Li-Cycle more than doubled its production of black mass in the first quarter of 2023 thanks to its new and upgraded electric vehicle (EV) battery recycling “spokes” in the United States

The battery recycling company produced 1,853 tonnes of black mass in the first three months of this year, more than double the 702 tonnes produced in the same three months last year, chief financial officer Debbie Simpson said during Li-Cycle’s earnings call on Monday May 15.

This was driven by the startup of the company’s “spokes” operations in Arizona and Alabama, and upgrades in New York, she said.

Higher production, as well as the addition of new customers, helped Li-Cycle sell more black mass too. The company sold 881 tonnes in the first quarter, up by 13.82% year on year from 774 tonnes, according to an earnings presentation accompanying the call.

“Currently, and for the near term, we produce and sell black mass under contractual arrangement,” Simpson said. “Our mid- to long-term goal is to utilize our black mass production and feedstock for the [Rochester, New York] hub, which will manufacture battery grade materials, including lithium, cobalt and nickel, unlocking significant incremental value.”

The Rochester hub, at the center of its “Spoke & Hub network strategy,” is slated for commissioning in late 2023, according to Simpson.

Li-Cycle plans to use this same “spoke and hub” strategy in Europe, she said. Last week, the company announced a partnership with Glencore to consider building a new hub in Italy with three “spokes” in the following locations:

  • Germany, with processing capacity of 30,000 tonnes per year, with the first line on track for commissioning in mid-2023 and second line to follow in the second half of this year.
  • France, with processing capacity of 10,000 tonnes per year, with the main line expected to be operational in the first half of 2024.
  • Norway, with processing capacity of 10,000 tonnes per year, with construction expected to be finished in the second half of this year.

Li-Cycle’s net loss widened to $39.4 million in the first quarter of 2023, versus a loss of $10.1 million in the same quarter last year. Revenue was $3.6 million, from $8.0 million in the same comparison, partially driven by lower nickel and cobalt prices, according to Simpson.

But the company expects to receive a loan of $375 million from the US Department of Energy in mid-2023, thanks to the Inflation Reduction Act, according to Simpson.

Li-Cycle also recently completed its agreement with VinES, the largest battery manufacturer in Vietnam, it announced in November.

“The agreement further contemplates the possible construction of a dedicated spoke located close to the VinES manufacturing site in Vietnam,” the company said in its earnings release on Monday. “An investment decision regarding the dedicated spoke facility is expected to be made in 2025. In the meantime, Li-Cycle will process VinES material utilizing Li-Cycle’s North American spoke network.”

Fastmarkets is proposing to launch weekly price assessments for black mass payable indicators in the South Korea market from mid-May 2023 in response to greater market interest in recycled battery raw materials.

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