Li-Cycle, a Canadian lithium-ion battery producer and recycler, has announced signing a non-binding letter of intent to receive nickel-bearing battery scraps from LG Energy Solutions (LGEC) and recycle them into nickel sulfate to supply to both LGEC and LG Chem Ltd (LGC).

As per the commercial agreement, Li-Cycle through its off-take partner Traxys North America will supply around 22,000 tons of nickel sulfate for LGC and LGEC over 10 years, starting from 2023. This supply would be able to power 300,000 high-performing electric vehicles.

In addition to this, the LGEC and LGC are to invest USD 25 million each in Li-Cycle purchasing a total of around 2 million Li-Cycle common shares at a subscribed price of USD 11.32 per share. The investment is expected to close upon completing the commercial agreement to purchase battery scraps and supply recycled nickel sulfate.

The partnership and investment cater to LGC’s environmental-social-governance (ESG) principles and LEGS' commitment to creating a circular economy for lithium-ion battery production. The investment is also likely to support Li-Cycle in scaling battery production to keep up with the growing demand for lithium-ion batteries.