Li-Cycle Holdings Corp. announced that it will proceed with the construction of its first commercial Hub facility, which is being developed within the Eastman Business Park near Rochester, NY. In view of rapidly growing demand for lithium-ion battery recycling, Li-Cycle will increase the input processing capacity of the Hub by over 40%, from 25,000 tonnes to 35,000 tons of “black mass” annually (equivalent to approximately 90,000 tonnes of lithium-ion battery equivalent feed annually). With its increased capacity, the Hub will be able to process battery material that is equivalent to approximately 225,000 electric vehicles per year.

The Company estimates that the Hub will require a total capital investment of approximately $485 million (+/-15%), which can be funded from existing balance sheet cash.  Li-Cycle also expects to explore various opportunities to optimize its capital structure, for example, with potential credit from government-related institutions.  The Hub will be fully integrated with Li-Cycle’s existing network of Spoke facilities across North America.  Li-Cycle’s Spoke facilities take in end-of-life batteries and battery manufacturing scrap to produce “black mass”, an intermediate product containing valuable metals such as nickel, cobalt and lithium.  The Hub will transform that black mass into critical battery grade materials to be returned back to the lithium-ion battery supply chain. Li-Cycle’s Spoke facilities will be the primary suppliers of feedstock for the Hub. Once the Hub is fully operational, Li-Cycle expects to be the #1 or #2 domestic U.S. based supplier of battery grade advanced materials.

The total addressable market for lithium-ion battery recycling in North America continues to accelerate as battery manufacturers are investing to build the supply chain to support electrification. Megafactory investments are now projected to surpass 500 GWh capacity by 2025, approximately 11x the current capacity. Based on independent industry forecasts (including from Benchmark Mineral Intelligence) and Li-Cycle’s internal analysis, Li-Cycle estimates that there could be nearly 250,000 tonnes of lithium-ion batteries available for recycling from manufacturing scrap in North America alone by 2025.  Upsizing the Hub enhances the Company’s ability to meet the increasing commercial needs of leading global customers within the lithium-ion battery supply chain.

“We believe the upsizing of our commercial Hub facility is timely, to capture growth from heightened demand with the mainstreaming of electrification in North America driving significant new battery megafactory deployments. Even with the increased capital investment, we expect the Hub project to deliver highly accretive returns,” said Li-Cycle’s President, CEO, and co-founder, Ajay Kochhar. “This is an exciting time for Li-Cycle as we advance the strategic execution on our integrated Spoke & Hub network and enable critical commercial solutions to the growing needs for domestic supply of battery materials in North America.”

For more information, visit www.li-cycle.com.

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