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Lithium Australia subsidiary set to capitalise on booming lithium ferro phosphate battery market

Lithium ferro phosphate (LFP) batteries are a precursor to lithium-ion batteries (LIB) that require less nickel and cobalt for their manufacture.

Lithium Australia NL - Lithium Australia subsidiary set to capitalise on booming lithium ferro phosphate battery market
VSPC has a patented processing technology that can produce advanced LFP cathode powders.

Lithium Australia NL’s (ASX:LIT) (FRA:3MW) battery research and development subsidiary VSPC is set to capitalise on a lithium ferro phosphate battery market that is expected to expand by 500 per cent by 2030.

LIT shares have moved positively in response, climbing by as much as 56 per cent to A$0.21, a new 3-year high.

As previously covered by Proactive, VSPC has been conducting trials in its lab to produce lithium-ion battery cathode precursors from LFP.

LFP-type LIBs require less energy metals like nickel and cobalt, and also provide safer power storage.

Positive LFP outlook

Lithium Australia managing director Adrian Griffin said LFP would become the fastest-growing sector of the overall LIB market, as electric vehicle and battery energy storage system (BESS) makers sought to address nickel and cobalt supply chain issues.

“It is a market forecast to grow 500% by 2030. Cost, safety and performance advantages are driving manufacturers towards LFP batteries for both EV and energy storage applications,” he said.

“The use of LFP simplifies the supply chain and reduces exposure to critical metals, nickel and cobalt in particular.

“Only 2% of global LFP cathode powder production occurs outside China, whereas future jurisdictions of high demand are likely to include Europe, India and North America. This creates a real opportunity for us.”

Global LIB concerns

In a race to meet targets to tackle climate change, governments around the world have set higher targets for electric vehicles, which has increased the demand for LIBs and storage systems, and thus increased the demand for nickel and cobalt.

“The recent change in direction of the LIB market, resulting in LFP demand rising at a greater rate than competing LIB chemistries, and the lack of installed LFP production capacity outside China, provides an outstanding opportunity for VSPC,” Griffin said.

Subsidiary making progress

VSPC has a patented processing technology that can produce advanced LFP cathode powders, a precursor to LIB batteries.

It has made significant process towards commercial production of the powders in recent months, beginning with the first manufacture of high-quality LFP powders in late November.

That was followed in early December by the company improving the energy density of the powders by adding manganese, and in mid-December by final trials that successfully reduced the overall cost of the process.

The process produced battery-grade iron oxalate from a variety of iron sources including iron ores and industrial waste products with widely varying impurity levels (between 5% and 20%) and has been highly effective in eliminating the impurities.

This indicates that iron streams of variable quality, including iron-rich waste from several industrial sources, can be used as feed for the process.

Notably, the electrochemical performance of the LFP produced from VSPC’s battery-grade iron oxalate is equivalent to LFP created using commercial grade iron oxalate.

Next steps

VSPC will complete a preliminary feasibility study for LFP cathode production during this quarter, taking into account emerging market dynamics, to compare its production and use in a number of jurisdictions outside of China.

- Daniel Paproth

Quick facts: Lithium Australia NL

Price: 0.135 AUD

Market: ASX
Market Cap: $121.12 m

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