Livium Ltd (ASX:LIT, OTC:LMMFF) has outlined a path forward in the development strategy for its Battery Materials division, VSPC, as it progresses toward commercialisation.
A key component of this strategy will be the construction of a demonstration plant capable of continuous operation to produce lithium ferro phosphate (LFP), and the emerging lithium manganese ferro phosphate (LMFP).
Australian demonstration plant
Following internal risk assessments and customer engagement, the company has selected Australia as its preferred location for the demonstration plant, related to the commercialisation of VSPC’s LFP and LMFP.
Two key factors taken into account are the expected availability of Australian Government funding coupled with the need to build a larger offshore plant, which introduces higher risks.
The small-scale demonstration plant is capital efficient and allows sample sizes in line with customer product qualification requirements, which will facilitate the securing of binding offtake for VSPC products.
"Our focus on an Australian-based demonstration plant reflects our commitment to advancing VSPC’s technology in a sustainable and scalable manner,” Livium CEO and managing director Simon Linge said.
“This approach allows us to align our development with the growing global demand for LFP battery materials, which is underpinned by deployment of energy storage and electric vehicle adoption."
Full-scale production facility in sight
With binding offtake expected from this development, the demonstration plant serves as a critical stepping-stone toward the establishment of a full-scale production facility with an expected capacity of 25,000 tonnes per annum of LFP or LMFP.
A 25,000 tonnes per annum production facility has the potential to generate annual revenues of around US$319 million, assuming an LFP price of US$12.75 per kilogram.
Funding update
Livium has continued to evolve its VSPC product suite and has recently added new offerings in line with market demand and with the potential for reduced production costs. The demonstration plant will be capable of producing these new product offerings without significant change to prior designs.
To achieve this, Livium is pursuing non-dilutive government funding combined with private strategic partners, who will invest directly into VSPC. The company would prefer to eliminate reliance on shareholder contributions, whilst maximising value creation for stakeholders.
“By combining public funding initiatives with strategic private partnerships, we are seeking to advance VSPC whilst minimising equity contributions from Livium shareholders," Linge said.
The company says that it continues to make progress towards funding the development and operation of the demonstration plant, with further updates to come.