Toronto-based battery recycling company Li-Cycle Holdings Corp. announced it will receive a US$375 million loan from the U.S. Department of Energy to create a battery facility near Rochester, New York. 

Li-Cycle said in a news release Monday it received a conditional commitment from the U.S. governing body as part of its Advanced Technology Vehicles Manufacturing program. The facility will produce recycled battery-grade lithium and is expected to be the first of its kind in North America. 

“The Rochester Hub is a cornerstone asset for Li-Cycle and its stakeholders and will be an important contributor to the clean energy economy,” Ajay Kochhar, the president and chief executive officer of Li-Cycle, said in the release. 

When running at full capacity, the release said the facility could produce up to 8,500 tonnes of lithium carbonate, 48,000 tonnes of nickel sulphate and 7,500 tonnes of cobalt sulphate each year.

“As a sustainable pure-play battery material recycling company, we expect the Rochester Hub will position Li-Cycle as a leading domestic producer of recycled battery-grade materials for accelerating electrification demand to address climate change and secure energy independence,” Kochhar said. 

The loan will have a term of up to 12 years and certain conditions will need to be met before closing, which the release said is expected to occur in the second quarter of this year.

The facility will meet the battery needs of around 203,000 electric vehicles (EVs) each year, according to the U.S. Department of Energy. The governing body said the facility will advance electrification efforts in the U.S., while enhancing the country’s EV supply chain. 

Support provided to EVs through the facility’s output will reduce emissions by more than 716,000 tons of carbon dioxide each year, according to the U.S. Department of Energy.