Glencore, a commodity trading and mining company, has entered into a deal with Li-Cycle, a lithium-ion battery recycling company, to supply manufacturing scrap and end-of-life lithium-ion batteries.
As part of the deal, which is expected to close in Q3 2022, Glencore will invest $200 million in Toronto-based Li-Cycle.
Li-Cycle’s CEO Ajay Kochhar said that the agreements would “further secure and diversify” its lithium-ion battery supply and feedstock sources and help improve its position in North America and Europe.
According to Wood Mackenzie, the demand for lithium-ion batteries used in electric vehicles (EV) has been rising as the world seeks to transition away from fossil fuels by 2050. However, the recycling of lithium-ion batteries is not expected to take off before 2030 due to obstacles such as the lack of recyclable feedstock and the long life of EVs.
“The $200 million investment by Glencor will provide us with total cash greater than our anticipated capital needs for the completion of the Rochester Hub and the five Spokes currently in development,” said Debbie Simpson, Li-Cycle’s chief financial officer.
According to Mercom Research, in Q3 2021, Koch Strategic Platforms, a subsidiary of Koch Investments Group, made a $100 million investment in Li-Cycle by purchasing a convertible note to support the company’s rapidly expanding growth opportunities in North America, Europe, and Asia.
According to Mercom’s Q1 2022 Funding and M&A Report for Storage, Grid & Efficiency, total corporate funding (including VC, Debt, and Public Market Financing) in Battery Energy Storage came to $12.9 billion in 26 deals compared to $4 billion in 27 deals in Q4 2021. Funding increased significantly year-over-year compared to $4.7 billion in 18 deals in Q1 2021.