Australia To Jump Into LFP Industry

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Electric vehicles need batteries. Batteries need cathodes. Australian mining needs to move up the value chain. All these needs will be met by the establishment of Avenira’s LFP cathode manufacturing plant in Darwin, in Australia’s Northern Territory. The cathode manufacturing plant will be linked to Avenira’s Wonarah phosphate project 1010 km away by road. The nearest settlement is the village of Camooweal 190 km away with a population of 240 people. Operations in both Wonarah and Darwin will be powered by a combination of solar, wind, and gas.

The phosphate mined can be used to manufacture lithium-ferro-phosphate (LFP) batteries, LFP cathodes, and fertilizer. It is expected that within two years, Avenira could be one of only three LFP cathode manufacturers outside of China, giving global EV manufacturers more supply and more choice of supplier of battery grade material. Avenira hopes to commence construction on the LFP plant late next year, with LFP cathode production to commence in 2025.

But why LFP batteries?

“After Tesla, many major vehicle manufacturers in the world, such as Volkswagen, Ford, Stellantis, Mercedes and BMW, announced that they’d be moving standard range vehicles to LFP batteries. One of the reasons for this was the predominance of EV battery fires in NCM (nickel cobalt manganese) battery EVs. NCM batteries, have thermal stability problems and need to be cooled, unlike LFP batteries,” Brett Clark, Avenira’s chair and chief executive officer, explained.

The Northern Territory government says that this project has the potential to create 1,000 jobs in mining and manufacturing in the territory. This backs up its claim that the Northern Territory is open for business. Approximately $4 billion in revenue should flow into the Australian economy.

Some EV manufacturers are phasing out the use of NCM batteries, particularly for lower range cars and personal transportation devices like e-scooters and e-bikes. The new generation of LFP batteries are catching up to their more energy dense NCM cousins. There are other advantages, too.

“From an ESG (environmental, social and governance) perspective, LFP batteries are more recyclable — you’re not recycling cobalt, nickel, and other toxic materials,” Clark said. “They’re also cheaper to manufacture and they have other recharging properties which means you can get about 30% to 40% more recharge cycles from them compared to traditional NCM batteries.”

The matter of them being cheaper may also have a significant role in their market growth.

As the rEVolution gathers pace, there is plenty of room to grow. Avenira is expected to make the final investment decision on the Wonarah project next quarter, then move to a trial phase of mining. Avenira will aim to ramp up the supply of battery-grade LFP production as soon as possible.

Avenira plans to ship the phosphate by train, each train carrying 10,000 tons — starting with one train and then increasing to 3, depending on demand. Avenira’s CEO is looking for efficiencies in construction and commissioning of the trains. Efficiencies can be achieved by onshoring mining and downstream processing practices. This equates to fewer transport and logistical costs, making its integrated LFP supply chain more economical.

Avenira has partnered with Taiwanese battery material pioneer Aleees. The Darwin LFP plant replicates Aleees’ operating LFP battery cathode material plant in Taiwan. This partnership reduces the risk to Avenira. “This MOU opens the door for Avenira to learn from Aleees about LFP battery cathode manufacturing technology. We can leverage this experience to optimise the production of phosphoric acid from the Wonarah Project and develop downstream assets to produce Australia’s first LFP precursor cathode material,” Clarke said.

“While DSO production is taking place at Wonarah, and Avenira is generating first cashflow, the company will work alongside Aleees to advance the LFP plant in Darwin. Having achieved DSO production from Wonarah and first LFP cathode production from its Darwin plant, Avenira will then aim to produce a thermal phosphoric acid product from an additional processing facility at Wonarah.

“This midstream product will then be used as feedstock for the Darwin LFP plant. Prior to the thermal phosphoric acid plant coming online, Avenira would source thermal phosphoric acid from Aleees’ existing supply chains to feed the Darwin facility.”

Aleees was founded in 2005, with its main office and factory located in Taiwan. It is a lithium-iron phosphate (LFP) battery material manufacturer. It is one of the few companies outside China with complete LFP battery material manufacturing technology and patents. Also note that Aleees Taiwan owns more than 120 exclusive patents worldwide.

“Prior to 2015, Aleees were the largest LFP cathode material manufacturer globally,” Clark said. “But China has moved ahead massively around LFP cathode production since then through a lot of subsidies and low-entry costs from a capex (capital expenditure) point of view.”

Tesla with CATL LFP batteries. Photo cleantechnica media library

The enhancement of green-energy, high-tech development in the city is still promising. “One of the most exciting opportunities created by renewable energy technologies like cathode materials is the ability to change the world’s sustainability,” says Brandon Chang, head of the Aleees’ Australian arm.

“The key thing for us as a company is to make a value-added product,” Clark said. “This starts off with direct shipping ore, before moving to an LFP cathode manufacturing facility in Darwin. Then we build out our phosphoric acid process as well. So we’re focused on integrating downstream manufacturing and dealing in materials that are going to be in continuous and growing demand in ex-China supply chains.”

Clark also noted that Darwin is close to key export markets and has core transportation infrastructure, like ports and rail connections, in place. Darwin to Taiwan is almost the same distance as Darwin to Canberra, Australia’s national capital (4160 km and 3934 km respectively.)

“The view that we’re getting from the global markets is that cathode material should be manufactured close to upstream materials, whereas battery cell manufacturers should be close to the electric vehicles and energy storage system manufacturers,” Clark said.

The tension between China and the USA as well as the Russian invasion of Ukraine have highlighted the need for diversification of supply of materials critical for the rEVolution. Building a vertically-integrated LFP operation is certainly a smart move for Avenira and beneficial for Australia’s green transition also.

David Waterworth is a retired teacher who divides his time between looking after his grandchildren and trying to make sure they have a planet to live on. He is long on Tesla [NASDAQ:TSLA].

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