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Glencore Strikes Supply Deal with Li-Cycle for Recycled Battery Metals

An employee stands by a logo for Glencore Agriculture in Glencore Plc's offices in Rotterdam, Netherlands, on Tuesday, April 25, 2017. Since taking over Glencore Agriculture in 2002, Chris Mahoney has overseen the transformation of the unit into a standalone enterprise that generates more revenue from owning fixed assets in strategic locations than simply trading. Photographer: Simon Dawson/Bloomberg

Glencore Plc will take recovered battery metals from Li-Cycle Holdings Corp. as part of a long-term supply deal that gives the Canadian recycling firm an inside track with one of the world’s biggest commodities producers.

Glencore will send spent lithium-ion batteries and manufacturing scrap to the Toronto-based startup, which will also supply the Swiss giant with recovered metals including lithium, manganese, cobalt and nickel from Li-Cycle’s facilities, the companies said in a Thursday statement announcing the partnership. Glencore has been advancing efforts to boost recycling of the batteries that power electric vehicles, including its  plans to build a U.K. plant as part of a deal to help Britishvolt Ltd. develop Britain’s first large-scale EV battery plant.

Electric automakers, mining companies and chemical supplier are racing to control more supplies of materials that are key to transitioning the world to cleaner energy sources. Car manufacturers and industry analysts expect recycled batteries to play a vital role in addressing supply constraints over the long term. Recycling may also help tame soaring commodity prices that threaten to deliver the first rise in battery costs since at least 2010.

An estimated 62,000 tons of used EV and stationary storage packs reached their end of life last year, and that will rise to 4 million tons by 2035, according to BloombergNEF, Bloomberg’s energy and data analysis unit. Worldwide, consumers and companies are expected to buy almost 26 million EVs annually by 2030, and junkyards will take in nearly 1.7 million tons of scrapped batteries, according to BNEF estimates.

Glencore will also make a $200-million investment in Li-Cycle by purchasing a five-year convertible note, according to the statement. Li-Cycle agreed to nominate Kunal Sinha, Glencore’s head of recycling, to its board of directors.

Shares of Li-Cycle surged 8.8% to $7.82 at 10:46 a.m.

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