December 20, 2023: Pressure is mounting on troubled lithium recycling tech developer Li-Cycle, which is facing possible legal action and is at the center of questions from US lawmakers over a planned $375 million government loan.

Batteries International reported last month that Li-Cycle had extended the suspension of construction work at its planned lithium battery recycling hub in Rochester, New York — after revealing the estimated cost of the project could double to up to $1 billion.

At least two law firms have since announced the filing of class action lawsuits against Canada-based Li-Cycle, relating to statements made by the firm about rising project costs.

One law firm, Kirby McInerney, said it had filed a suit in the US District Court for the Southern District of New York on behalf of Li-Cycle investors.

Separately, key Republican members of the House of Representatives have called on the Department of Energy’s Loan Programs Office (LPO) to give details of a proposed $375 million loan to Li-Cycle — saying they were concerned about the government making possible “reckless investments”.

Li-Cycle said last month talks were continuing on how to meet conditions to secure the government loan to help support construction at Rochester.

However, in a December 6 letter to LPO director Jigar Shah, House energy and commerce committee chair Cathy McMorris Rodgers — and the chairs of subcommittees for oversight and investigations and energy, climate and grid security — demanded to see “all internal guidance, memos, criteria, or policies governing each stage of the loan and loan guarantee application review process”.

The letter also highlighted concerns by legislators over the filing of the class action lawsuits.

Meanwhile, uncertainty remains over a proposed European lithium ion recycling joint venture between Li-Cycle and mining giant Glencore.

Glencore said in a regulatory filing on December 6 it may convert a $225 million note into Li-Cycle stock, giving Glencore a stake of just over 11%.

Both companies declined to comment further when contacted by Batteries International.