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Lithium Australia (ASX:LIT) on track to tap appealing opportunities in cobalt- and nickel-free LIB market

Highlights

  • The LIB market space continues to see an increasing proportion of cobalt-free batteries, with several all-electric vehicles released in 2020 powered by LFP-type LIBs.
  • LFP-type LIBs use 20% less lithium per unit of stored energy and are much safer than their cobalt and nickel counterparts. 
  • VSPC has patented several processes for producing high-performance LFP cathode powder while other significant developments are underway. 

VSPC Ltd, a wholly owned subsidiary of Lithium Australia NL (ASX:LIT), remains ahead of the curve to tap the appealing opportunities in the market for cobalt- and nickel-free lithium-ion batteries (LIBs). 

The LIB market space continues to see an increasing proportion of cobalt-free batteries as BYD and Tesla, Inc., launched their 2020 series of all-electric vehicles powered by lithium iron phosphate-(LFP) type LIBs. These LFP-type LIBs do not contain cobalt. 

RELATED ARTICLE: Lithium Australia subsidiary bags Australian patent for Ni- and Co-free battery cathode powders

The increasing penetration of LFP-type LIBs is significant given the phenomenal rise in the production of 'new-energy vehicles', which as per figures, were released in August 2021 and rose by 180% year on year.

LFP-type LIBs gain traction

LFP-type LIBs use 20% less lithium per unit of stored energy in comparison to their more common cobalt- and nickel-based competitors. Moreover, LFP batteries are much safer, leading many automobile manufacturers to use them in their entry-level EVs. 

In the current buoyant setting, Argus Media figures highlight the growing role of LFP batteries, which accounted for 52% of total LIB production in the first eight months of 2021. 

Batteries 

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The white-hot price of lithium increases LFP-type LIBs demand

A recent report by The West Australian highlights a 144% increase in the price of lithium concentrate this year alone. As a result, the lithium concentrate (spodumene) of Pilbara Minerals Ltd attracted a price of US$2500/tonne (on a 6% lithia basis) at the Battery Material Exchange digital auction of 14 September 2021. 

Due to their lower raw material requirement, LFP-type LIBs are gaining a critical cost advantage in the current scenario when the price of spodumene has more than doubled since late July. Significantly, spodumene is a hard rock and the principal source of lithium. 

VSPC makes the right moves

VSPC Ltd has patented several processes for producing high-performance LFP cathode powder and high-energy-density variants that consist of lithium manganese ferro phosphate (LMFP).

Several cell manufacturers based in South Korea, Canada, France, Israel, China and Japan are testing these advanced battery materials. 

RELATED ARTICLE: Lithium Australia (ASX:LIT) files patent applications for battery recycling process   

At the same time, VSPC continues to assess opportunities to expand its LFP and LMFP production to a commercial-scale offshore. As a result, the firm has also applied for a collaboration stream grant called the Modern Manufacturing Initiative of the federal government. The grant could help VSPC develop an Australia-based supply chain for the battery industry.

A bright outlook for non-Chinese LFP production

China is currently the world's largest LFP producer, accounting for 98% of such battery production globally.  

With the global markets proliferating and LFP now the dominant LIB chemistry in the rapidly growing markets, there could soon be little LFP available outside of China to satisfy the current demand. In Australia, there is the potential to create a new LIB industry and retain much of the downstream value of lithium mining for the benefit of everyone in the country.

With LFP set to take off, there exists significant growth potential for its non-Chinese production, irrespective of scale. It places new LFP market entrants like VSPC on the brink of an immense commercial opportunity. 

LIT stock was trading 8% higher to AU$0.135 on 17 September 2021 (AEST 03:56 PM).

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