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Li-Cycle released its Q2 earnings at the start of August, providing a gauge of not only how the company is fairing in its operations but also giving an indication to the health of the wider recycling industry. Liquidity remains an issue for the company, with operations continuing to run at a loss, reflecting wider issues within the industry.
A change of direction for Li-Cycle facilities
In the call, CEO Ajay Kochhar, revealed the company’s Ontario Spoke facility, that was initially paused in November 2023, has now been cancelled. This facility joins its Sardinia hub in being cancelled, while its French and Norwegian plants are still on pause and the expansion of its German Spoke has been delayed. The company will instead focus its optimisation efforts on its spokes operating in Germany, Arizona, and Alabama.
The Rochester Hub, previously referred to as a “cornerstone asset” by the CEO, is still delayed as the company grapples with financing the project. Kochhar announced a change to the facility that it would now be designed to produce mixed metal hydrates (MHP), an intermediary material, and lithium carbonate, as opposed to the initially announced battery grade manganese, cobalt and nickel salts.
Although framed as a cost-saving measure, the estimated cost of USD960 million for the hub remains unchanged. With USD470 million already spent, Li-Cycle is seeking a USD375 million loan from the DOE to complete the project. Kochhar referred to the DOE loan as a “top priority”. However, even if successful, the company will still be USD115 million short, making the fate of the facility dependent on the loan’s approval.
Commercial operations gaining traction
Two notable trends occurred in Q2 compared to previous quarters. First, Li-Cycle’s feedstock sources saw a significant change. Previously, …
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