Livium Ltd subsidiary VSPC Pty Ltd has taken a big step towards its goal of establishing an Australian lithium ferro phosphate (LFP) demonstration plant by securing a grant of up to A$30 million from the Australian Renewable Energy Agency (ARENA).
VSPC, a developer of the critical battery material LFP, has executed a binding agreement with ARENA for the grant, which will be put towards the construction and operation of the plant.
The LFP demonstration plant will be operated for two years and in this time the company expects to secure binding LFP and/or LMFP offtake contracts to allow commercial scale-up.
This non-recourse funding from ARENA was secured following an extensive due diligence process, including an independent technical assessment.
Validates technology
Livium CEO and managing director Simon Linge said: “This grant from ARENA represents a significant step forward for our battery materials commercialisation.
"The independent due diligence undertaken as part of the funding validates our technology and the ARENA grant is expected to facilitate further strategic private capital to complete funding for the LFP demonstration plant.
"We are thankful to ARENA for their support for the demonstration plant which seeks to unlock a patented technology and advance western LFP supply chains which will ultimately seek to increase access to high-quality, cathode materials.”
About the plant
The Australian LFP demonstration plant includes the detailed design, construction and operation of a 250-tonnes-per-annum facility over about 46 months (21 months construction and 24 months operation and customer testing).
The project will provide VSPC’s potential offtake partners and investors with samples and evidence that it can manufacture high-performance LFP and LMFP continuously at scale.
This will ultimately provide these key stakeholders with the confidence that VSPC’s proprietary 'RC Process' is viable and can be scaled up to commercial production.
The project aims to increase the 'RC Process' technology readiness level (TRL) from 6 to 9 and ultimately secure binding offtake agreements for commercial quantities of product.
Following the initial two-year operation and customer testing period, the Demonstration Plant will be continually used to support the scale-up of new products and supply samples for new customer qualification.
Investment being sought
Strategic investment into VSPC for the project is being sought to close the A$30 million funding gap ahead of a Final Investment Decision (FID). Full funding will allow completion of the project.
The company has appointed advisors to coordinate discussions around partnership and growth funding options, which includes strategic partners and other financiers.
Potential breakthrough
“This project represents a potential breakthrough in cathode powder technology," ARENA CEO Darren Miller said.
"If the project is successful, it could help catalyse competitive manufacturing of cathode powders and help diversify supply chains.
"As global demand for energy storage rises, domestic advancements in cathode powder positions Australia as a leader in advanced battery manufacturing, giving us opportunities to contribute to global supply chains and create new economic opportunities in renewable energy innovations.”
Grant conditions
Under the agreement, ARENA will provide VSPC with a grant of up to $30 million, subject to satisfaction of certain project milestones covering the period of design, construction, commissioning and operation of the project.
This agreement contains provisions commonly found in government grant agreements of comparable size, nature and type including customary administrative preconditions regarding operating and financial arrangements, capacity to carry out the project and reporting requirements.
The non-dilutive grant funding is subject to conditions precedent including completion of a Front-End Engineering and Design (FEED) study, securing sufficient funding to deliver the project and a final investment decision (FID) by VSPC.
Plant budget
Total estimated cost to deliver the detailed design, construction, commissioning and operation for two years is A$60 million, with plant and equipment comprising around 63% of the total spend and the remainder working capital to support operations.
The plant and equipment capital cost estimate was compiled by Lycopodium and the working capital estimate was compiled by VSPC, covering the expected 24 months of operation.
VSPC is engaging globally with potential customers for both LFP/LMFP products, with discussions taking place in strategic markets including South Korea, India, Japan, Europe and the US.
Offtake MoUs
The company has engaged with more than 20 potential offtakers, the majority of whom have received samples for initial assessment.
Initial responses have been positive with several parties indicating their interest and the necessity for larger quantities to conduct in-depth testing and evaluation.
From these potential customer interactions, VSPC has secured non-binding MoUs with several potential offtakers, demonstrating not only their interest but also their commitment to further assessing VSPC's products.