Following a competitive tender process, the Lithium Australia subsidiary, VSPC, has selected Lycopodium to provide engineering support to VSPC’S DFS of a 10,000 tonnes per annum (tpa) LFP manufacturing facility.
Lycopodium, which delivered an efficient, client-focused engineering solution for the DFS, has assembled technical specialists in key areas to support the scale-up and commercialisation of VSPC’s patented RC Process for LFP cathode powder production.
“We are very pleased to be partnering with Lithium Australia. LFP technology represents an exciting aspect of the battery chemical supply chain, and we look forward to leveraging our battery metals expertise, including engagement with the FBICRC (Future Battery Industries Cooperative Research Centre), to assist in successful development of this project,” Lycopodium general manager – Brisbane Matt Allen said.
Since completing a pre-feasibility study, VSPC’s DFS development activities have focused on providing samples for customer assessment and developing a detailed understanding of product pre-qualification requirements for the electric vehicle sector.
“Progress on VSPC’s DFS has been strong over the past six months, with preparatory work undertaken by Lithium Australia. We will now use Lycopodium to drive the DFS to completion,” Lithium Australia managing director Adrian Griffin said.
“Delivering a robust DFS is critical to ensuring that we are well-prepared for funding and development activities. Pre-qualification will be undertaken in parallel, to allow for the securing of offtake to support project financing.
“Construction of a dedicated small-scale production facility for the purpose of material accreditation is a critical part of the feasibility process. We are committed to the construction of such a facility, the design of which will form part of the DFS.”
DFS scope and pre-qualification requirements
VSPC has expanded the scope of the DFS to include assessment of an early-stage, semi-commercial production facility to service requirements for product pre-qualification prior to implementing the 10,000 tpa commercial LFP manufacturing facility.
In a prospectus dated 10 February 2021, Lithium Australia noted a potential for acquisition of assets from Johnson Matthey PLC. That acquisition, which would potentially have provided facilities for LFP pre-qualification, failed to complete, resulting in plans for the construction of a pre-qualification plant being included as part of the DFS.
The path to production
Successful completion of the DFS for an LFP manufacturing facility would signal a major step-up in production capacity for VSPC, which currently owns and operates a research and development facility and pilot plant in Brisbane, Queensland, Australia.
VSPC will advance customer offtake discussions in parallel with the DFS.
Historically (and outside China), the lithium-ion battery market has embraced cathode chemistries featuring nickel and cobalt. However, in the last 18 months there has been a significant shift, with LFP-type lithium-ion batteries emerging as the fastest growing segment of that market.
In 2020, global production of LFP cathode material reached 156,000 tonnes. By 2021, LFP had become the fastest growing class of cathodes, with production worldwide increasing more than 2.5 times – to 407,000 tonnes.
ICCSino, China’s leading battery supply chain analytics group, forecasts continued rapid growth of LFP until the end of the decade, projecting production of 1.7 million tonnes by 2025, and more than 3 million tonnes by 2030 (representing a 35 per cent CAGR).
According to Bloomberg NEF, in 2021 LFP eclipsed NMC for use in energy storage, and the former is expected be to the major LIB chemistry choice in the energy storage sector until at least 2030.
A more recent analysis by Wood Mackenzie Power & Renewables forecast that global demand for LFP will exceed 3 Terra-Watt hours by 2030 and predicts that LFP will be the dominant battery chemistry (compared to NMC) by 2028.
That said, less than 1 per cent of LFP is currently produced outside China; this means that, despite its modest size, VSPC’s LFP project, if commercialised, would position VSPC as a significant (non-Chinese) producer of that product.
Choice of jurisdiction
In terms of jurisdiction, the lack of meaningful LFP production beyond China provides many supply opportunities. At present there is no LFP production in the US, even though most EV producers there offer LFP battery options in their entry-level models, as well as in some high-end vehicles.
The US National Blueprint for Lithium Batteries 2021-2030 promotes the development of domestic supply chains for all lithium batteries and battery materials, including LFP, from resources through to chemicals and, finally, battery production. Ultimately, then, LFP needs to be produced locally, which is likely to position the US as a jurisdiction of very high demand for that product.
Worldwide, consumption of LFP as an active battery material seems set to burgeon, due to the rising demand for EVs and battery energy storage, and North America is likely to be one of the most rapidly expanding LFP markets during this decade. The North American opportunity will therefore be incorporated into the VSPC DFS.