Lithium Australia set for expected boom in EV metals market

Lithium Australia is confident an evolution in the global electric vehicle industry will underpin a 500 per cent expansion in the lithium-ferro-phosphate type, lithium-ion battery market within the next 10 years.

Importantly for Lithium Australia, the company’s fully owned subsidiary, VSPC is already primed to tackle that market. VSPC has successfully developed new lithium-ion battery cells using lithium ferro phosphate, under its patented processing technology developing advanced cathode powders.

Lithium Australia’s VSPC has also developed another LFP-derivative, by adding manganese to the mix, saying it now produces the triumvirate of improved safety standards, greater energy density and longer-lasting energy output.

According to the company, the addition of manganese to deliver a lithium-manganese-ferro-phosphate, or “LMFP”, battery gives the energy output density a boost without compromising the battery’s already superior attributes.

Lithium Australia Managing Director, Adrian Griffin said:“Lithium Australia subsidiary VSPC Ltd (‘VSPC’) has patented processing technology for the production of advanced LFP cathode powders, 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. 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 the Company.”

According to Lithium Australia, VSPC’s evaluation of low-cost feed materials for LIB production has the potential to make Australia - already the world’s largest lithium producer - a future battery manufacturing hub.

Importantly, the company said the recent boom for LIB’s in electric vehicles has placed stress on the supply chain for nickel and cobalt in both the nickel-cobalt-manganese and nickel-cobalt-aluminium LIB battery recipes.

This development bodes well for a growing demand forecast for LFP batteries in general, and specifically VSPC, with Lithium Australia expecting a global industry shift in battery chemistry over coming decades.

The company quoted Benchmark Mineral Intelligence’s second quarter review from last year which underlined a staggering forecast for traditional lithium battery metals.

According to Lithium Australia, most EVs and many battery energy storage systems, or “BESS”, contain lithium-nickel-cobalt-manganese, or “NCM”, and lithium-nickel-cobalt-aluminium, or “NCA”, LIB cells. However, if these battery chemistries continue to be used in EV and BESS applications, the amount of lithium required by 2050 is likely to rise 20-fold, cobalt by a similar amount and nickel a staggering 30-fold.

Whilst many LIB types are being considered as substitutes for NCM and NCA batteries, most are in the early stages of commercialisation, according to Lithium Australia.  The company said only one – LFP - is currently widely available, and deservedly so as the company says it exhibits many benefits including superior safety, longer life and lower cost.

Furthermore, Lithium Australia noted its LFP cathode powders use less lithium and no cobalt or nickel at all, when compared with traditional LIB’s.

The company also noted governments around the world were putting quotas in place around EV take-up rates across the next three decades, led by China which is targeting EV penetrations rates of around 40 per cent by 2030, just nine years away.

Whilst LFP has long been used in transport applications such as trucks and buses, major EV producers including Tesla, VW and BYD Auto have all adopted LFP for EVs built in China for the local market. Tesla and BYD have both started a trend in distributing these EV’s beyond China’s borders, according to Lithium Australia.

The company said global demand for LFP had increased by 25 per cent over the last twelve months, bringing Chinese LFP cathode powder manufacturing up to more than 100 ktpa.  Despite this, only 2 per cent of global LFP cathode powder production originates outside of China, according to the company.

The recent change in direction of the LIB market has resulted in LFP demand rising at a greater rate than competing LIB chemistries, and according to Lithium Australia the lack of installed LFP production capacity outside China presents an outstanding opportunity for VSPC.

VSPC will complete a preliminary feasibility study for LFP cathode production before the end of March this year which includes these emerging market dynamics, comparing its production and use in several jurisdictions outside of China.

Lithium Australia also expects the market for stationary energy storage, driven by renewable energy and the transition to 5G communications, to grow four-fold by the end of the decade, potentially creating a market for an additional 90 ktpa of LFP cathode powder by 2030.

The next step for Lithium Australia will be to turn its LFP and LMFP cathode powder blends into a transport industry-friendly, rapid-charging battery manufacturing business to help shed the globe of its reliance on fossil fuels and lead-acid batteries.

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