Lithium Australia thrives amid the Covid-19 crisis

  • October 06, 2020 09:38 PM AEDT
  • Team Kalkine
Lithium Australia thrives amid the Covid-19 crisis

Summary

  • LIT has released FY20 Annual Report and maintained that the year 2019/20 had been a year of achievement for the company.
  • The company is well-positioned to take advantage of the growing demand for renewable energy and energy-storage capabilities.
  • LIT remained focussed to achieve its 2020 goals of commercial production of cathode material and securing of funding to execute commercialisation plans for LIT's processing technologies.
  • Envirostream and Soluna Australia are doing exceptionally well and capitalising their respective markets.
  • LFP as a lithium-ion battery is gaining popularity due to factors like - safety, cost, environmental, social and governance.

Australian firm, Lithium Australia NL (ASX: LIT) is focussed to build a circular battery economy through the sustainable supply of materials to the battery industry.

On 30 September 2020, LIT released its FY20 Annual Report for the year ended on 30 June 2020. The Chairman, George Bauk, confirmed that the virus-stricken year 2020 has been a year of achievement at Lithium Australia.

Demand rises during the unprecedented global virus crisis

In a defining year, the pandemic has hugely altered the way people are living worldwide. People are working from home, learning new skills, do not travel, attend virtual meetings and much more.

In this transformed environment, LIT focused on those of its business units that were closest to commercialisation – recycling and the sale of energy storage systems. The company is also reviewing the remaining units intending to achieve maximum value for shareholders.

Lithium Australia is well-positioned to take advantage of the growing demand for renewable energy and energy-storage capabilities. It is committed to creating a circular battery economy by ensuring an ethical and sustainable supply of energy metals to the battery industry across the supply chain. LIT maximises the life of mined as well as previously used lithium units from exploration for raw materials through chemical processing technology, lithium Ferro phosphate (LFP) cathode and battery production and stationary energy storage systems to used battery recycling.

Business Divisions

Source: ASX announcement dated 30 September 2020

Source: ASX announcement dated 30 September 2020

LIT's business divisions include the following:

  • Raw materials division comprises exploration and resource development.
  • Lithium chemicals division (extraction and refining; technologies primarily focused on lithium but also covering other battery metals). Batteries division (development of cathode materials; the sale of lithium-ion batteries (LIBs) and battery-based energy storage systems (ESS).
  • Recycling division comprises recovery of components of spent batteries, including but not limited to LIBs.

Lithium Australia Checks 2020 goals

The company remained focussed towards its set goals for 2020 and continued working towards them. These goals included:

  • Commercial production of cathode material
  • The securing of funding to achieve commercialization plans for LIT's processing technologies, including LieNA®, and
  • Expansion of the recycling infrastructure

Lithium Australia secured funding in December 2020 and recently (on 09 September 2020) completed a share purchase plan raising AUD 4.5 million. The aggregate of these two fundings raised over AUD 8.5 million in the process. LIT is planning to use the raised capital to accelerate its plans of growing the recycling business and eliminating the debt that came as part of the December 2020 funding package.

Mr George Bauk has acknowledged the support of current and new shareholders in achieving this exceptional result of the funding.

The lens on two of LIT's Subsidiaries - Envirostream, Soluna

Envirostream Australia Pty Ltd is a 90 per cent owned subsidiary of Lithium Australia. Over the year, LIT increased its equity position in Envirostream Australia from 11.76 per cent to 90 per cent.

Related: Lithium AAustralia'sEnvirostream Australia Ownership hits 90%; Stock Zoomed Up 3.12 Midday

Envirostream operates Australia's only mixed-battery recycling facilities in Melbourne. The company produced its first product and completed its first sales. Moreover, it inked an offtake agreement with a metal refiner to sell the mixed metal dust concentrate obtained from used batteries.

Envirostream is poised to begin recycling spent EV batteries, after several successful trials. Mr Bauk credited these achievements to the fully integrated team at LIT and Envirostream.

Soluna Australia 50 per cent owned subsidiary of Lithium Australia is a joint venture between Lithium Australia NL and Shanghai-based DLG Energy Co., Ltd. In December 2019, LIT announced the establishment of Soluna Australia to market lithium-ion batteries and energy-storage products into the rapidly expanding Australian renewable energy storage market.

In a short time frame, from being established as a joint venture, it is now organising product delivery and approvals to making a sale and, eventually, managing installation.

Soluna, got the approval from the Clean Energy Council in June 2020, and posted its first sale and managed installation in July 2020.

To know more, read –

LFP as a lithium-ion battery is getting popular

LFP batteries are considered ‘'safe’' so are an ideal choice for energy-storage systems and the future growth in LFP as lithium-ion battery chemistry looks promising. It has become the chemistry of choice for Tesla EV battery packs in China due to its ability to negate the requirement for fire suppression in electric vehicles (EVs).

LEP will likely continue to be seen as the battery technology of choice due to various compelling factors - social and governance factors, safety, cost, depth of discharge and environmental.

The company will be in a position to take advantage of the growing market of LFP-based cathode material, thanks to the ongoing excellent results for LIT's wholly-owned subsidiary VSPC produced LFP-based cathode material.

VSPC has improved its business over the last year by optimising its process for the production of LFP cathode material. It has established a strong foundation for the commercialisation process.

 

With the pandemic continuing to affect the globe, healthcare companies are evaluating their lead compounds for COVID-19 treatment. Future revenue for these stocks depends on the probability of launching an approved treatment in the market.

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