Lithium Australia NL (ASX: LIT) is a metals and mining sector company with the primary aim to ensure a sustainable and ethical energy metals’ supply to the battery market as it works to create a circular battery economy by recycling old lithium-ion batteries (LIBs).
Recently on 27 November 2019, Brisbane, Australia-based VSPC (LIT’s 100%- owned nanotechnology subsidiary) announced completion of stage 1 cathode-material testing with potential customers in China and Japan. VSPC informed that its lithium-ferro-phosphate (LFP) cathode material is at par with power and energy cells specifications as prescribed by Shanghai -based DLG Power Battery Co., Ltd.
The examination of VSPC’s Gen 4 LFP cathode material was started in March 2019 at DLG’s R&D facility located in Shanghai, China where the materials were subjected to long-term cycle testing, assessed in a commercial 18650 battery-cell manner, and tested under distinct electrochemical and temperature conditions. After the testing, it was inferred that VSPC’s LFP material was in line strict specifications given by DLG for the materials to be utilised in LIB cells for both power and energy applications.
Lithium Australia had inked a letter of intent (LoI) agreement with DLG Battery Co., Ltd, a leading Chinese battery manufacturer, in May 2019, and pursuant to that, incorporated a 50:50 jointly-owned business, Soluna Australia Pty Ltd that would cater to exclusively supply and sell Soluna Battery packs and modules across Australia. To expedite commercialization of VSPC's patented cathode powder technology to be used in DLG batteries, Lithium Australia has informed that the company would be establishing a technology alliance as keeping up with DLG’s cathode material specification is a key precursor for it to agree to purchasing the VSPC LFP battery cathode product.
VSPC is currently building a supply chain in place in order to efficiently deliver LFP to various makers of LIB cell across China, including DLG from 2021 onwards with the main target applications being large transport vehicles and LIB cells for energy storage.
Battery-cell producers from Japan have also submitted a positive feedback to VSPC. They are currently examining LFP products at a laboratory scale. Until the date of the announcement, the company recorded that the electrochemical performance of VSPC’s LFP material was at par with the requirements as set by the Japanese and the company is now working towards refining properties of its products for certain applications and to also prepare for a larger scale testing in 2020.
While potential customers are testing the cathode product, no formal binding offtake agreements has been signed as of now and there is no confirmation as to when some offtake agreements would be reached. Although, the company will inform the shareholders in case any offtake agreement becomes binding in the upcoming period.
It is being estimated that the market demand for LFP would expand over the next ten years, particularly owing to its suitability in the energy storage products and certain types of transportation equipment. In automotive applications, VSPC LFP can be used as a replacement for conventional batteries and it can also be used as a reserve for power supplies. The commercial sales of VSPC LFP are expected to be initiated by 2022 across Japan.
The market requirement for LFP is projected to grow rapidly in the next ten years, particularly due to its suitability for energy storage and certain types of transportation. LFP could act as a replacement for conventional batteries in a variety of automotive products and as back-up for power supplies. The Japanese market could see the sales of VSPC LFP in 2022, as indicated by the company.
Advantages of LFP cathode materials
What makes LFP the ideal LIB chemistry of choice for energy-storage and some transportation applications? These include-
All these attributes make LFPs ideally suited to the power storage market when energy density is less critical, as is the case with hybrid vehicles, e-buses and logistic trucks, as well as military and marine applications.
Stock Performance: LIT’s market cap is around AUD 17.63 million with ~ 534.27 million shares outstanding. On 29 November 2019, the LIT stock was trading at AUD 0.035 up by 6% as compared to its previous closing price.
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