Lithium-Iron-Phosphate Batteries
LFP Batteries, or lithium-iron-phosphate batteries, offer a lower-cost and environmentally friendly alternative to conventional lithium-ion batteries. At present, LFP batteries account for just 20% of planned battery production in the US but this expected to accelerate to 30% by 2025-2026. In comparison, it accounts for over 50% in other parts of the world, such as China.
Cost is one of the major driving factors behind the increased demand for LFP batteries from electric vehicle (EV) manufacturers. Conventional lithium-ion batteries require metals such as nickel and cobalt, which have limited current supply but also a limited number of new potential supplies. A tight supply market and increased demand has driven the price of these metals higher in recent years.
Cobalt is largely a by-product of the copper mining industry, with much of its production coming from the geopolitically unstable Democratic Republic of Congo. These factors severely limit how much global cobalt production can increase.
Compared to other metals, copper and nickel deposits are not only scarcer but also underexplored, with around US$2.8 billion estimated to be spent on copper exploration in 2022, while just US$621 million was spent on nickel exploration over the same period. Nickel miners also have long lead times. To move from discovery to an operating nickel mine takes between 4-27 years, while a typical copper mine takes 4-12 years.
As demand for these metals increases, supply will be able to expand but it is unlikely to be at the rate required to keep conventional lithium-ion batteries cost effective, which should increase the use of LFP batteries.
LFP batteries also offer other advantages, such as longer battery shelf-life and superior fire safety. These credentials have driven major EV manufacturers to announce plans to diversify battery production from other technologies to LFPs. Tesla, Ford, Mercedes-Benz, Hyunda and Rivian have all increased or announced a planned increase in their use of LFP batteries.
As a result, the global lithium-iron-phosphate battery market is projected to grow from US$10.12 billion in 2021 to US$49.96 billion by 2028. The large increase in lithium-iron-phosphate battery use will also increase demand for phosphate, which has traditionally been mined to supply the fertilizer industry.
Phosphate
Around 95% of global phosphate deposits are sedimentary in origin, and they contain high amounts of deleterious trace elements, radioactivity, and organic matter, which makes it unsuitable for battery-grade phosphoric acid, which is used in LFP batteries, without significant processing.
North American phosphoric acid production decreased by 43% between 2000 and 2019, while global demand for battery grade phosphoric acid is expected to increase by 40% by 2034. This supply squeeze, as we have seen for nickel and cobalt in recent years, is likely to drive the price of battery grade phosphoric acid higher.
First Phosphate Corp
First Phosphate Corp is a CSE listed mineral development company focused on igneous massif-type anorthosite-phosphate deposits, which represent 1% of the world’s phosphate deposits and are the highest purity phosphate deposits. The company is planning to become an integrated producer of battery grade phosphoric acid for the North American LFP battery market.
First Phosphate’s flagship project is the Lac à l’Orignal deposit located in northern Quebec. The project has a NI-43 101 complaint and pit constrained indicated mineral resource estimate of 15.8 Mt at grades of 5.18% P2O5, 4.23% TiO2 and 23.90% Fe2O3, with an inferred resource of 33.2 Mt at grades of 5.06% P2O5, 4.16% TiO2 and 22.55% Fe2O3.
The project is located just 140 kilometres (km) from the Saguenay Deep Sea Port, which can be accessed via a pre-exiting logging road. The project can also access hydropower, being in close proximity to the Hydro-Quebec main power line, which will provide a green and low-cost power source while giving the potential product a low-CO2 footprint.
In March 2023, shortly after its listing on the CSE, First Phosphate commenced work on a preliminary economic assessment (PEA), which is due to be completed in 4Q 2023. The PEA will give investors the first look at the potential economics of the Lac à l’Orignal deposit and will be an important milestone for the company.
Initial metallurgical studies demonstrated that the proposed flowsheet for processing ore from the Lac à l’Orignal deposit could recover 91.4% of the apatite to a concentrate containing 40.2% P2O5, which gives the company the confidence that it can now move towards creating a pilot-scale processing plant.
The company has also signed a memorandum of understanding with one of the few producers of battery grade phosphoric acid, Prayon SA, to assess the potential for offtake, toll processing, and developing a purified phosphoric acid processing plant at Lac the Port of Saguenay, Quebec.
First Phosphate also announced recently assay results from the first two drill holes completed at the Bégin-Lamarche project, which contains a 7 km long magnetic anomaly. These initial results demonstrate the presence of two shallow but wide layers of high-grade phosphate mineralisation, including:
- 23.8 meters (m) at an average grade of 10.6% P2O5 from a depth of 5.9m and 83.5m at an average grade of 7.8% P2O5 from a depth of 131.9m (BL-23-01)
- 13.1m at an average grade of 9.9% P2O5 from a depth of 16.6m and 57.3m at an average grade of 8.4% P2O5 from a depth of 143.8m (BL-23-02)
The company is planning to follow up on these initial high-grade drill holes later this year. What is most remarkable about this property is that it shows some of the highest grade phosphate findings ever recorded for the area and it is only a mere 75 km from the deep sea port.
Zinc-Air Regenerative Fuel Cell System
Zinc-Air Regenerative Fuel Cell System (ZRS) is a patented technology that stores energy in the form of zinc particles, similar in size to grains of sand. In order to release energy, the zinc particles are combined with oxygen drawn from the surrounding air. The system then recharges, by returning oxygen to the surrounding air using power from the grid or renewable sources.
ZRS decouples the linkage between energy and power and unlike lithium-ion batteries, it does not require new stacks in order to scale. Instead, increasing the size of the fuel tank and quantity of recharged zinc fuel will allow the system to store more energy. As a result, ZRS is expected to have a much lower capital cost per installed kilowatts per hour (kWh) compared to lithium-ion batteries.
This technology also has several other advantages over conventional Li-ion batteries, with zero capacity fade over the battery’s long life and the batteries are non-flammable and non-toxic.
Zinc8 Energy Solutions (CSE:ZAIR)
Zinc8 Energy Solutions, a CSE listed energy storage company, has 21 US patents, with 5 pending, for its ZRS technology. In order to commercialise its product, the company is collaborating and partnering with large project developers to offer a build-own-operate solution to energy storage.
The company has already received acclaim from New York City Department of Buildings (NYC DOB), which regulates more than one million buildings and the Real Estate Board of New York (REB NY), New York’s leading real estate trading association, winning of NYC DOB’s 2020 Innovation Challenge and REB NY’s 2022 PropTech Challenge.
Zinc8 has been awarded a grant from the Empire State Development of up to US$9 million in performance-based Excelsior Jobs Program tax credits to incentivize the company to locate and establish its first US-based production facility in New York State.
Alongside this, the company was issued tax-exempt revenue bonds for up to US$10 million to undertake the buildout and completion of Zinc8's first commercial manufacturing facility within Ulster County, New York. The proceeds from the US$10 million are expected to be utilized for the acquisition of machinery, equipment, fit-up and improvements to the facility.
Zinc8 has successfully demonstrated its technology at the pilot plant scale with a 10kW zinc-air battery energy storage system for a Global Cloud Provider. The company is now constructing much larger and longer duration systems, with two demonstration projects underway:
- A 10-year agreement with the Power Authority of the State of New York for the installation of a 100kW 10-hour duration storage system and;
- Another 100kW and 15-hour duration storage system for a New York City housing complex commissioned by the New York State Energy Research and Development Agency (NYSERDA).
These projects will commence between 2023 and 2024, with Zinc8 targeting commercial production from 2024.