The rise of lithium-iron-phosphate (LFP) batteries was a preferred theme on the Benchmark Week Summit in Toronto, the place trade executives stated the chemistry’s mixture of security, versatility and decrease prices is driving explosive development throughout electrical automobiles and grid storage.
In keeping with Adam Webb Head of Power Uncooked Supplies at Benchmark Mineral Intelligence, LFP batteries accounted for simply 20 p.c of world lithium-ion manufacturing in 2020. On the time, nickel-rich chemistries reminiscent of nickel-manganese-cobalt (NCM) have been extensively considered because the trade’s future.
That outlook has shifted dramatically.
“Now we’re seeing LFP at about 61 p.c of world lithium-ion batteries in comparison with round 32 p.c for NCM,” Webb stated, noting that forecasts counsel LFP might method 70 p.c of the worldwide market within the coming years.
A lot of that development has been pushed by China, the place the chemistry dominates manufacturing.
A battery invented in North America, however scaled in China
John Passalacqua, CEO of First Phosphate (CSE:PHOS,OTCQB:FRSPF), stated LFP expertise has been evolving for greater than twenty years and continues to achieve floor.
Though the chemistry was developed in North America by way of analysis on the College of Texas with collaboration from Hydro‑Québec and the Université de Montréal, most business manufacturing migrated to China within the early 2000s.
“LFP has been with us for about 25 years, and over these 25 years it has solely gotten stronger,” Passalacqua stated.
He added that the expertise’s versatility has helped drive adoption throughout a variety of sectors past electrical automobiles, together with telecom methods, industrial automation and grid-scale power storage.
“Solely about 5 to 10 p.c of LFP demand in the present day is definitely electrical automobiles,” he stated.
Provide chains change into the subsequent battleground
As demand accelerates, trade leaders say the actual problem is constructing provide chains able to supporting LFP manufacturing outdoors China.
Invoice McLean of Liberty Stream Infrastructure Companions stated geopolitical tensions and nationwide safety considerations are forcing Western economies to rethink the place vital battery supplies are sourced.
“The actual query is how briskly we will transfer provide chains out of China,” McLean stated.
His firm is pursuing a direct lithium extraction technique that recovers lithium from wastewater produced by oil and gasoline operations within the Permian Basin.
By tapping current infrastructure, the corporate hopes to convey small modular lithium manufacturing models on-line extra rapidly than conventional mining tasks.
The missed ingredient: Phosphate
Whereas lithium typically dominates headlines, Passalacqua stated the battery sector could quickly face a scarcity of one other vital element: phosphate.
Lithium represents solely a small portion of an LFP battery’s cathode chemistry, he famous, whereas phosphate accounts for roughly 60 p.c.
Phosphate utilized in fertilizers and batteries differs considerably in purity and processing necessities. Fertilizer-grade phosphate is usually derived from sedimentary deposits and processed to provide phosphoric acid appropriate for agricultural vitamins, the place ultra-high purity isn’t required.
Battery-grade phosphate, against this, have to be refined to a lot greater purity requirements to fulfill the stringent efficiency necessities of LFP batteries
“Individuals have been chasing lithium, cobalt, nickel and graphite,” Passalacqua stated. “But when the world is shifting to lithium iron phosphate batteries, the large query turns into: the place will the phosphate come from?”
His firm is creating high-purity igneous phosphate deposits in Saguenay–Lac‑Saint‑Jean in Quebec, aiming to provide battery-grade phosphoric acid with out counting on fertilizer-grade sedimentary phosphate.
Constructing the battery trade from the bottom up
All of the panelists emphasised that constructing a aggressive North American battery sector would require focusing first on uncooked supplies slightly than gigafactories.
Passalacqua argued that many early battery ventures failed as a result of they tried to construct manufacturing capability earlier than securing dependable sources of vital minerals.
John Passalacqua, CEO and director of First Phosphate, reveals the viewers a LFP battery constructed from solely North America-sourced supplies.
Picture through Georgia Williams.
“You can not construct a constructing beginning with the thirtieth ground and put the inspiration in later,” he stated. “Provide chains should be constructed from the underside up.”
Governments are more and more recognizing that actuality, he added, pointing to new vital mineral incentives and funding applications geared toward creating upstream assets.
As power storage demand continues to surge, fueled by electrification, synthetic intelligence and renewable energy, trade consultants say the race to safe these assets is just simply starting.
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Securities Disclosure: I, Georgia Williams, maintain no direct funding curiosity in any firm talked about on this article.
