June 20, 2024

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Biden-Backed Battery Firm Plunges After Pausing Construction

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(Bloomberg) — Li-Cycle Holdings Corp., which is set to receive significant backing from the Biden administration, saw its share price slashed nearly in half after announcing it would pause construction on a first-of-its-kind lithium-ion-battery recycling plant.

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The Toronto company said it would halt work on its Rochester Hub pending completion of a strategic review, including scope and budget. Li-Cycle said it is facing escalating construction costs that exceed prior guidance and is working closely with the US Energy Department concerning its offer of a $375 million loan commitment.

Li-Cycle is one of the many companies vying to help the US meet surging demand for battery materials needed in the transition from gas-powered cars. The government is pouring billions of dollars in subsidies and tax incentives to build up a domestic supply chain, intended to help the US compete with China’s dominant industry position. The setback shows the challenges the US and the West face trying to essentially kick-start an industry from scratch.

Li-Cycle shares fell as much as 49% in New York. The stock closed at $1.23, down 46% for the day, its largest drop on record.

“The board of directors has decided to pause construction work on the Rochester Hub, pending a review of the project, including an evaluation of the go-forward phasing of its scope and budget, including construction strategy,” according to the statement. “As previously disclosed, engineering and procurement for the project are largely complete, with the current focus being on construction activities on site.”

Shares jumped 6% in February after the Biden administration announced the company’s US subsidiary would receive the loan to help finance expansion of a facility to recycle lithium-ion batteries into chemicals that can be used for the batteries of more than 200,000 electric vehicles a year. The funding is from the department’s Advanced Technology Vehicles Manufacturing Loan…

2023-10-23 18:20:22

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