One of the giants of the commodities business is launching a new deal with Li-Cycle. But, why?
What’s happening:
- Li-Cycle (NASDAQ: LICY) has announced a new offtake agreement with commodities conglomerate Glencore for mixed hydroxide precipitate being produced at their Rochester Hub facility
Why it matters:
- Mixed hydroxide precipitate is a highly important chemical compound for producing nickel and cobalt sulphates for lithium-ion battery manufacturing
- The new offtake deal from Glencore is happening alongside of Li-Cycle’s efforts to finalize a multi hundred million dollar loan from the United States Department of Energy for advancing their domestic battery material recycling operations
By the numbers:
- Li-Cycle expects that their Rochester Hub facility will produce 8,250 tonnes of lithium carbonate annually and 72,000 tonnes of mixed hydroxide precipitate annually
- Glencore will purchase 100% of all the mixed hydroxide precipitate that is produced by Li-Cycle’s Rochester Hub as part of their new offtake deal
Going deeper:
- Glencore is also an early strategic investor in Li-Cycle and has injected fresh capital into the company multiple times since Li-Cycle initially went public
The fine print:
- Li-Cycle’s share price is down dramatically from their initial debut on the public markets through a SPAC transaction which was valued at more than a billion dollars and has also faced a multitude of challenges in both scaling up their operations as well as raising growth capital
