August 16, 2024: Troubled Canadian recycler Li-Cycle has confirmed that its first battery recycling ‘spoke’ facility could be shut down, as the firm “explores financing and strategic options” to increase near-term liquidity.
The August 8 announcement came just days after the Toronto-based lithium ion recycler said it had promoted interim CFO Craig Cunningham to the post of CEO.
Operations at the Kingston, Ontario spoke facility started in 2019 but were “paused” last November.
Now the firm has warned Kingston’s closure may loom as part of an ongoing review, which followed a leadership shake-up last spring and job cuts representing 17% of the firm’s workforce to generate about $10 million in cost savings on an annualised basis.
The restructuring announcement came a week after the company said “significant additional funding” would be needed before it could restart construction of its planned Rochester, New York lithium battery recycling hub — as it revealed the cost estimate of the project had increased to $960 million.
Spoke facilities are where all types of lithium ion batteries are transformed from a charged state to what Li-Cycle describes as an inert product.
The resulting black mass is then transferred to a hub, where cathode and anode materials are processed into battery grade end-products for reuse in battery production or other applications.
Li-Cycle reported second quarter revenue for 2024 on August 8 of $8.4 million. During the first half of the year, Li-Cycle said its largest customer source of revenue was a US-headquartered vertically integrated EV and battery manufacturer with a substantial global EV market share.
The company also recently announced a recycling partnership with Daimler Truck North America.
As of June 30, Li-Cycle said it had cash and cash equivalents of $57 million, compared to just over $109 million at the end of March. The decrease was primarily driven by changes in working capital and investing activities partially offset by lower selling, general and administrative expenses.
