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By Ernest Scheyder
(Reuters) - The U.S. Department of Energy on Thursday finalized a $475 million loan for Li-Cycle Holdings, giving the metals recycler a financial lifeline to build a New York battery processing facility seen as key to outgoing President Joe Biden's vision for a domestic electric vehicle supply chain.
The long-awaited loan, which is $100 million higher than provisionally announced early last year, will keep the Glencore-backed company alive as it works to expand the recycling of batteries that are increasingly powering Americans' everyday lives, ranging from everyday electronics to EVs.
The loan for the plant, which would be one of the largest U.S. sources of the battery metal lithium, also cements a key part of Biden's climate agenda, ensuring the company receives government financial support regardless of any steps that President-elect Donald Trump may take when he assumes office in January.
Concerns that Trump could try to slow Washington's financial support for the renewable energy transition have spooked investors since his Tuesday victory. While Trump is not expected to be able to stop that transition, Biden officials are quickly moving to close loans and approve projects before January.
Li-Cycle had sought the loan for nearly three years, but cost overruns and technical issues forced it to hire a corporate restructuring expert last year, a step that sparked questions about its survival.
The company essentially found itself in a holding pattern while Washington reviewed the loan application, unable to advance its business plan even as it contended with rising inflation.
Its stock has dropped more than 75% in the past year.
The loan - which includes $445 million of principal and $30 million of capitalized interest - will allow the Toronto-based company to now solicit private capital to fund the remainder of its $960 million project, slated for Rochester near New York's border with Ontario.
Construction could take 12 to 15 months once full funding is secured.
"The loan demonstrates (the Energy Department's) role in supporting a strong domestic EV battery and critical materials supply chain, which is critical to strengthening America's national and energy security," said Jigar Shah, head of the Energy Department's Loan Program Office, which issued the financing.
Biden officials in recent weeks have pushed to advance several U.S. critical minerals projects before leaving office in January, including permitting ioneer's Nevada lithium mine, issuing a loan to Lithium Americas, and expanding a manufacturing tax credit to miners.