Glencore to invest $200M in battery recycler Li-Cycle

Commodity trader and mining company GlencorePlc is investing $200 million in battery recycler Li-Cycle Holdings Corp. It looks to expand the supply of battery metals for the electric vehicle (EV) industry.

Recycling is viewed as a significant potential new source of EV minerals, and governments and firms worldwide are boosting efforts to turn old batteries into new ones. This week, U.S. President Joe Biden’s administration announced that it would set aside $3 billion to fund EV battery recycling.

Switzerland-based Glencore’s financing will come in a $200 million note that is convertible to equity at $9.95 per share, roughly 38% more than Li-Cycle’s stock closing price on Wednesday.

Through the investment, Glencore will gain a seat on Canadian Li-Cycle’s board and has agreed to a standstill agreement, which restricts unsolicited takeovers. The deal is set to finalize in the year’s third quarter and privately held Koch Industries Inc. investors in Li-Cycle.

According to the agreement terms, Glencore will supply Li-Cycle black mass, shredded batteries that can be processed to extract metals such as nickel and cobalt, and other manufacturing scraps. This will give Li-Cycle access to more waste to recycle.

Glencore will also supply Li-Cycle with sulfuric acid and purchase certain metals produced during Li-Cycle’s recycling process.