Lithium Australia NL’s (ASX: LIT) wholly-owned subsidiary VSPC Pty Ltd has selected global engineering and project delivery entity Lycopodium to provide engineering support services for VSPC’s DFS of a 10,000 tonnes per annum (pa) LFP manufacturing facility following a competitive tender process.
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.
Since completion of a pre-feasibility study in April 2021, VSPC’s DFS development activities have focused on providing samples for customer assessment and developing a detailed understanding of product pre-qualification requirements for, in particular, the electric vehicle (‘EV’) sector.
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 implementation of the 10,000 tpa commercial LFP manufacturing facility.
Lithium Australia has previously 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 (‘LIB’) market has embraced cathode chemistries featuring nickel and cobalt (NMC). However, in the last 18 months there has been a significant shift, with LFP-type LIBs emerging as the fastest growing segment of that market.
In 2020, global production of LFP cathode material reached 156,000 tonnes (‘t’). By 2021, LFP had become the fastest growing class of cathodes, with production worldwide increasing more than 2.5 times – to 407,000 t.
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 t (‘Mt’) by 2025, and more than 3 Mt by 2030 (representing a 35% 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 (TWh) by 2030 and predicts that LFP will be the dominant battery chemistry (compared to NMC) by 2028.
That said, less than 1% 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.
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. 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,” Lithium Australia managing director Adrian Griffin said.
“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.”
