Li-Cycle cites rising costs as reason for ‘pause’ of construction on $485M Rochester Hub

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Citing a continuing rise in building costs, Li-Cycle announced this morning that it has “paused” construction on the $485 million Rochester Hub in the town of Greece “pending completion of a comprehensive review of the go-forward strategy for the project.”

Backed heavily by county, state and federal incentives, the Li-Cycle Rochester Hub is being built on 41 acres of land off McLaughlin Road near the Eastman Business Park and was to create up to 270 new jobs.

UPDATE: Li-Cycle’s ‘paused’ Rochester Hub project puts hundreds of workers in limbo

Engineering and procurement for the project are largely complete, Li-Cycle said in a news release, “with the current focus being on construction activities on site.”

But because of what Li-Cycle said were escalating construction costs, “the company expects the aggregate cost for the current scope of the project to exceed its previously disclosed guidance. In light of these developments, 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.”

Li-Cycle stock plunged nearly 50 percent following the announcement on Monday morning, from Friday’s closing price of $2.26 to a price of $1.16 at 10 a.m.

A Li-Cycle spokesperson late Monday morning did not elaborate on what the pause may mean in terms of the facility’s future as it relates to production and jobs, saying only that “additional updates on our near-term plans and project review process” will be included in the firm’s third quarter financial report, which will be released on Nov. 13.

The Greece facility is expected to “support the battery needs of approximately 203,000 electric vehicles (EV) annually,” according to the U.S. Department of Energy, which in February approved a $375 million construction loan for Li-Cycle.

The Canadian-based company said it continues to “work closely” with the Department of Energy with regard to the construction loan.

The project also received $110,855,687 in sales tax and property tax exemptions from the County of Monroe Industrial Development Agency (COMIDA) along with $13.5 million from New York State through the Excelsior Jobs Program in exchange for hiring commitments.

County and federal officials did not immediately respond to a request for comment. Monroe County Executive Adam Bello last Thursday morning posted on Facebook and tweeted on that he was “honored” to have just toured the Li-Cycle hub.

In August, roads were closed and 450,000 pounds of equipment crawled from the Port of Rochester to the construction site for installation of a crystallizer, which stands 85 feet tall and is 19 feet in diameter.

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