Evolution Energy Minerals Ltd (ASX:EV1) has ramped up efforts to become the global leader in sustainable battery production on the back of tightening European electric vehicle regulations.
“The growing demand for battery anode materials is obvious, but ensuring that those materials are sourced in a sustainable, ethical and transparent way is non-negotiable for battery manufacturers and financiers,” Evolution managing director Phil Hoskins said.
Move away from toxic chemicals
Close to 100% of the world’s battery graphite is produced in China using highly toxic chemicals such as hydrofluoric acid.
It is estimated that existing anode manufacturers in China use between 400 and 600 kilograms of hydrofluoric acid for each tonne of graphite feedstock.
But the European Commission is tightening regulations, which has in turn compelled vehicle manufacturers to demand the highest sustainability standards from their supply chains.
European pollution push-back
The European Green Deal includes a Circular Economy Action Plan, which sets out plans to move towards zero pollution. As part of this plan, by 1 July 2024, electric vehicle batteries will need to have a carbon footprint declaration, and over the next few years, those regulations will tighten so that by 2027, batteries will need to comply with maximum carbon footprint thresholds.
In view of these measures, European car manufacturers will need to source battery minerals with the highest sustainability credentials. Graphite is already listed as a priority raw material for sustainable sourcing in Volkswagen Group (XETRA:VOW)’s Responsible Raw Materials Report.
Rising to the challenge
Evolution is planning to be ready to meet the needs of Europe’s car manufacturers, by prioritising the development of a sustainable battery anode materials strategy. This strategy will complement its plans to meet downstream markets for high-value expandable and micronised graphite that were proposed in its definitive feasibility study.
The company has kicked off a commercial verification program to evaluate the production of what could become the world’s most sustainable coated battery anode materials. It plans to use commercially proven thermal purification technology rather than the current industry standard of chemical purification, which is damaging to the environment.
Evolution is also investigating the feasibility of using proprietary coating technology, as opposed to sending an intermediate product to a third party for coating.
Crucially, the company sees its Chilalo Graphite Project in Tanzania as critical to its green evolution.
It aims to maintain a chain of custody from mine site to coated battery anode materials for direct supply to battery manufacturers – this level of traceability allows battery manufacturers to easily assess the sustainability of their supply chain.
Evolution plans to develop battery anode manufacturing capacity close to battery manufacturers in Europe and the US as a second phase to the development of the company’s Chilalo Graphite Project in Tanzania.
The battery anode strategy is not a pre-condition to making a construction decision by the second half of the year, but Evolution will advance studies in parallel to provide leverage to this fast-growing market segment.
World’s most green
By combining environmentally-friendly thermal purification technology with a desire to develop Chilalo as the world’s first net-zero carbon graphite mine, the company is positioning itself to produce the world’s most green and sustainable battery anode materials.
Evolution’s strategy is to maintain supply chain custody of the graphite from the Chilalo mine site through to the production of a coated battery anode material.
Delivering this level of traceability is expected to be highly desirable to European battery manufacturers and automakers who need to demonstrate compliance with the increasingly regulated disclosure required from their supply chains.
“Sustainable graphite supply is fundamental to our strategy, with our aspirations of becoming the world’s first net zero carbon graphite mine,” said Hoskins. “We intend to embed that same sustainability ethos in our battery anode materials strategy, thereby becoming the supplier of choice to battery manufacturers of the future.”