Lithium Australia moves into cathode manufacturing and metals recycling
ASX-listed Lithium Australia NL (ASX: LIT) (“Lithium Australia”) has received acceptances to take on 99.7% of the Very Small Particle Company’s (VSPC) issued capital. VSPC was the brainchild of a number of Queensland academics who ploughed 14 years and approximately A$30M to the development of what Lithium Australia believes to be the world’s most advanced cathode production technology for lithium-ion batteries (LIBs). The acquisition of the unlisted, Brisbane-based public company was completed just 48 hours after Lithium Australia lodged compliance documents for its takeover offer.
VSPC’s top cathode production technology for lithium-ion batteries can precisely control the particle size and chemistry of cathode powders, using patented technology to generate the initial particle directly from solution. Batteries produced from VSPC cathode materials outperform industry benchmarks, pretty much guaranteeing Lithium Australia’s place in the high-margin end of the battery manufacturing industry.
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The VSPC acquisition grows Lithium Australia’s position as a processor of primary materials to that of a sustainable producer of lithium-ion battery components; the addition of VSPC to Lithium Australia’s technology base has not only provided it with exposure to the most profitable process step in the battery production cycle, but has also closed the loop of the energy-metal cycle by enabling the recycling of old materials into new battery cathode powders.
This massively simplifies the production process, improves quality control and reduces costs. The manufacturing process is compatible with other energy-metal technologies being developed by Lithium Australia, including the recycling of lithium-ion batteries via RCARC, and production of lithium chemicals from unconventional sources via the company’s proprietary SiLeach® technology.
At Core Consultants, we believe that recycling will feature far more heavily in the resources industry in the coming decades, and any company that moves into this area will ultimately have access to a wider range of feedstocks as well as the ability to avoid inflationary pricing periods that prone newly mined commodities by dealing in second-hand metals when appropriate. Looking at the escalating prices of battery metals today, this will certainly give Lithium Australia a serious leg-up into the future.
VSPC already has a pilot plant that incorporates cathode powder production as well as battery production and testing, and Lithium Australia will expedite recommissioning of that plant with a view to providing a range of cathode materials for assessment by major battery manufacturers. Currently, Lithium Australia is recruiting the staff required to undertake this task, and is negotiating a range of technical service agreements to provide the support necessary to ensure success.
The fact that the firm already has a pilot plant (that the former owners spent $30m developing) that simply needs to be re-commissioned makes this a game changer for Lithium Australia; VSPC has extremely valuable technology that can produce low cost, high quality cathode powders in a one of the most profitable parts of the supply chain. Lithium Australia feels that the previous owners were maybe more focused on the technology, without the necessary experience to drive the commercialisation in the right way.
Lithium Australia’s disruptive extraction processes are designed to convert hard rock lithium sources into lithium concentrates, from which advanced components for the battery industry can be created. By uniting resources and the best available technology, the company seeks to establish a vertically integrated lithium processing business capable of withstanding the market volatility inherent in growth phases. This company’s aggressive technological expansion has really paid off, and the lithium space just got a lot more competitive.