Li-S Energy launches $34m IPO to commercialise advanced lithium-sulphur battery technology

Brisbane-based lithium-sulphur battery creator Li-S Energy will use the proceeds of a $34 million initial public offering to “bring a better battery” to world markets.

Established in 2019 as a spin-off from diversified investment house PPK Group (ASX: PPK),  Li-S Energy is focused on the development and commercialisation of a new generation of high-performance batteries using enhanced lithium-sulphur (Li-S) chemistry instead of lithium-ion.

The company’s research team is collaborating with experts from Melbourne’s Deakin University and Brisbane’s BNNT Technology (BNNTL) to develop a novel technology using boron-nitride nanotubes (BNNTs, which are around one-thousandth the thickness of a human hair) as a nano-insulator in Li-S batteries.

Complex and expensive

BNNT is an advanced nanomaterial which has been presented by space agency NASA as a material which could help get humans to Mars.

But its production is complex and expensive, and supply and cost have historically prohibited its widespread commercial use.

The patent-pending combination of BNNTs and other nanomaterials with Li-S Energy’s battery components is expected to substantially improve battery energy capacity and cycle stability compared to current lithium-ion and Li-S options.

In short, it could bring the world a better battery.

Advancing the strategy

To advance its lithium-sulphur strategy, Li-S Energy intends to scale up its development and production team and build a pilot battery production plant prior to retrofitting its batteries into real-world products made by select original equipment manufacturers.

The strategy will be well funded by a $20 million capital raising in April and by the IPO, which was launched in August and seeks to raise $34 million through the issue of 40 million shares priced at $0.85 each.

The exercise will give Li-S Energy an expected pre-IPO market capitalisation of $544 million.

It includes a priority offer which will make $8 million in shares available to existing shareholders.

Major shift needed

Initial product testing has shown that BNNT-containing batteries developed by Li-S Energy can substantially improve capacity, performance, stability and cycle life compared to conventional Li-S batteries without BNNTs.

Chairman Ben Spincer said despite the research, there is still a major shift needed in the market.

“To enable the mass electrification of the vehicle market and other industries, there needs to be a fundamental shift and breakthrough in battery technologies,” he said.

“New technologies are required to also address the inherent limitations of lithium-ion batteries which cannot currently be overcome due to their fundamental chemistry.”

Mass adoption

Mr Spincer said emerging markets and mass adoption will be the target when Li-S Energy embarks on the road to commercialisation.

“Worldwide demand for more powerful and efficient batteries is increasing exponentially with the development of electric vehicles, drones and grid storage solutions, plus portable devices such as mobile phones, personal computers, medical devices and an extensive range of tools for consumer and industrial markets,” he said.

“We are focused on the development of affordable, high-performance Li-S batteries which have the potential to drive adoption in these markets, creating electric vehicles that drive further, drones that fly longer and mobile devices that last for days instead of hours.”

Lithium-ion capacity limits

Industry research shows current lithium-ion battery technologies which use carbon or carbon-silicon anodes and metal oxide cathodes are reaching their theoretical energy capacity limits and cannot be made significantly more efficient.

These batteries rely on heavy metals such as cobalt, manganese and nickel in the cathode, making them expensive and up to three times heavier than their equivalent energy Li-S counterparts.

From a safety perspective, lithium-ion cells have been cited in a number of serious failures worldwide including in mobile phones which have subsequently exploded and in electric vehicles which have caught fire and caused fatalities.

Commercial lithium-ion batteries are also prone to “thermal runaway” which occurs when the heat generated within a battery exceeds the amount of heat dissipated to its surroundings and results in similar catastrophes.

Higher energy density

Li-S batteries have a higher energy density than lithium-ion cells meaning they will last longer before running out of charge and could increase the time between recharges.

The lithium-sulphur-carbon makeup of Li-S batteries is not as weighty as heavy metal oxides and can facilitate a lighter battery for the same energy stored, which has significant advantages for applications such as wearable devices, drones and aircraft.

Additionally, sulphur is an abundant element in the earth’s crust and costs less than 1% of the price of lithium cobalt oxide used in the cathodes of Li-ion batteries.

Safety first

According to Britain’s flagship battery research program The Faraday Institution, Li-S batteries are considerably safer than their lithium-ion predecessors.

“The ‘conversion reaction’, which forms new materials during charge and discharge, eliminates the need to host Li-ions in materials, and reduces the risk of catastrophic failure,” it said.

“Alongside this, the highly reactive lithium anode is passivated with sulphide materials during operation, which further reduces the risk of a dangerous failure [and] while thermal runaway remains a possibility in Li-S cells, research has shown that the magnitude of this failure is significantly lower than in lithium-ion cells.”

Global battery market

Lithium-ion batteries currently dominate a global market currently valued at $47.27 billion, and expected to grow to around $95 billion by 2025.

According to Bloomberg Finance’s Electric Vehicle Outlook 2020, significant demand for lithium-ion batteries is being driven by a global shift towards electric vehicles where demand is forecast to accelerate from 101 gigawatt hours per year in 2020 to 1753GWh/yr in 2030.

The passenger segment is set to grow from 71GWh/yr in 2020 to 1295GWh/yr in 2030, at which time it is expected to account for 63.3% of total Li-ion demand.

“Improving the specific energy capacity of batteries and reducing their associated cost will be critical to delivering against this dramatic forecasted increase in demand,” Mr Spincer said.

Li-S Energy is expected to hit the ASX boards later this month under the ticker code “LIS”.