Post reaching the binding agreement to increase its stake in Envirostream Australia Pty Ltd to a 90% ownership interest, Lithium Australia NL (ASX: LIT) (Company) completed the formalities for joint battery marketing operations with the China-based battery and energy storage specialists, DLG Group.
LIT Surges 22% Intraday
Post the announcement, on 09 December 2019, the LIT stock hit an intraday high of $0.044, shooting up 22%, before finally closing the day’s trade at a price of $0.038 with a market capitalisation of $19.23 million.
The principal activities of Lithium Australia NL comprise of project acquisition, mineral exploration and process development, primarily for the extraction and recovery of lithium with an aim to ensure an ethical and sustainable supply of energy metals to the battery industry by creating a circular battery economy while also enhancing energy security in the process.
The new enterprise with 50% owned by Lithium Australia and 50% by DLG, trading in the name of Soluna Australia Pty Ltd, has been incorporated as a Joint Venture for selling lithium-ion batteries and Soluna energy storage products into the rapidly expanding Australian renewables energy market.
The terms of the joint venture agreement include the following:
- Formation of a 50:50 partnership for the supply and sale of DLG’s lithium-ion batteries (LIBs), battery packs and energy-storage products within Australia.
- Establishment of a technology alliance to accelerate the commercialisation of VSPC Ltd’s (100% owned subsidiary of Lithium Australia) proprietary cathode powders for use in DLG batteries.
- Providing for fresh battery materials as well as recycling solutions for the swiftly growing energy-storage industry.
Technological Cooperation Front
Lithium Australia intends to create advanced components for the global battery industry, and for stationary energy storage systems within Australia using the chemicals generated from the conversion of lithium silicates and unused fines from spodumene processing, to lithium chemicals.
Under the Lithium Australia/DLG agreement, both the parties-DLG and Lithium Australia are expected to,
- facilitate technological cooperation between VSPC Ltd and DLG for both cathode and battery R&D, and
- develop VSPC's cathode powders, initially with a focus on lithium-ferro-phosphate LIBs, LFP being the ideal battery chemistry for Australian energy-storage applications.
Lately, DLG has been working with VSPC to test LFP cathode powders (produced at VSPC’s pilot plant in Brisbane, Australia) which have been used in the manufacture of commercial 18650 LIBs at DLG’s Shanghai R&D facility.
As recently announced by Lithium Australia, the VSPC-produced LFP products, tested by DLG, had met DLG’s rigid requirements for energy and power cells.
To learn about LIT’s quarterly activities for the September 2019 quarter HERE.
Prominent Industry Opportunities
With serious supply-chain constraints in the delivery of LIBs to Australian customers (identified through a detailed investigation of the Australian energy-storage industry), and the Australian renewable energy sector currently experiencing strong growth, Soluna Australia intends to provide a new and reliable supply source for renewable energy solutions to power users in Australia.
As per an estimate by the Australian Council of Learned Academies, the requirement of 16 GWh of energy storage is anticipated to ensure electricity supply security for the medium forecast rate of uptake of renewable energy by the year 2030. This is further expected to necessitate an investment exceeding $5 billion in energy storage solutions in the upcoming decade, with a major contribution of LIBs in the same.
Along with maintaining domestic stock levels of energy-storage products to meet demand and provide local sales and technical support, Soluna Australia plans to collaborate with customers and innovate to create energy-storage solutions suitable for remote-site and mining applications, as well as evaluate the feasibility of manufacturing battery packs in Australia as part of its supply-chain solutions.
Additionally, Soluna Australia would offer battery-recycling solutions through the battery recycling business unit of Lithium Australia.
LIT seeks to vertically integrate lithium recycling, extraction and processing through an optimum combination of resources and innovation, with the recycling of old lithium-ion batteries to new being intrinsic to the Company’s plan.
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