Lithium Australia’s VSPC to begin commercial LFP cathode production as demand grows

Lithium Australia ASX LIT VSPC lithium ferro phosphate cathode powder LFP China
Lithium Australia's VSPC is looking to produce LFP cathode material for batteries that can be used in light rail and other public transport.

Lithium Australia’s (ASX: LIT) wholly-owned subsidiary VSPC has finalised its strategy for entering the commercial battery market, with the company to initially begin producing lithium ferro phosphate (LFP) cathode powders within China.

As demand picks up, VSPC will then look to expand into other markets.

The strategy has been driven by “significant growth” in demand for LFP batteries.

According to Lithium Australia, LFP batteries offer benefits to other established lithium-ion battery formulas, particularly, the nickel-cobalt-manganese lithium-ion batteries that are used in electric vehicles.

Specific advantages to LFP batteries include lower production costs, greater longevity, wider operational range, enhanced safety, and more sustainable metal feedstocks.

Additionally, Lithium Australia anticipates ongoing research on LFP derivatives will narrow the energy-density gap between LFP and nickel-cobalt-manganese batteries.

“VSPC produces some of the most advanced LFP cathode powders available and has struck a number of deals to pave the way for first commercial production in the near future,” Lithium Australia managing director Adrian Griffin said.

“The first stage of development will allow market penetration with minimal capital investment and is a convenient means of establishing a customer base.”

“The second stage will enable delivery into expanding and more lucrative markets,” he added.

Shift towards LFP batteries

Battery producers are investing in expanded production to meet forecast demand in electric vehicles, energy storage and the lead-acid battery replacement market.

Lithium Australia pointed out Contemporary Amperex Technology (CATL) had invested in LFP batteries, while LFP-powered Teslas have been planned for China.

Traditional lead-acid battery manufacturers are also transitioning to produce LFP batteries.

VSPC gears up for production

Using a two-stage approach to enter the commercial battery market, VSPC plans to begin manufacturing LFP cathode powders in China at an established facility.

The company is currently negotiating use of Beijing Saideli Technology Incorporated Company’s existing plant, which VSPC hopes will give it market entry without a large capital outlay.

VSPC expects this approach will reach the costs agreed with Shanghai-based DLG Battery Co and give it preferred supplier stated.

Initially, VSPC will produce up to 1,200 tonnes per annum of LFP cathode powder, which will be supplied to the Chinese market and used to test other markets as well.

As part of this, VSPC is in discussions to supply up to 1,000tpa to cathode producers in other jurisdictions by 2022.

Longer-term growth

To meet demand global demand, VSPC plans to undertake a definitive feasibility study into building a commercial plant outside of China.

Via partnerships with the CSIRO, the University of Queensland and other researchers, VSPC is looking to refine its technology and develop a rapid-charge battery for use in public transport, including light rail.

In VSPC’s second stage commercialisation strategy, it will expand to a 5,000tpa cathode powder plant to meet mounting demand in international markets.

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