First Phosphate Enters MOU For Production Of Up To 40,000 Tonnes of LFP Cathode Active Material

FULL DISCLOSURE: This is sponsored content for First Phosphate.

First Phosphate (CSE: PHOS) mid-day yesterday revealed that it has entered into a memorandum of understanding to support the production of lithium iron phosphate cathode active material.

The arrangement has been entered into with that of American Battery Factory of Utah, who currently manufactures LFP battery cells. The company is currently in the process of developing a network of safe LFP cell gigafactories across the US, in an effort to develop a domestic battery supply chain.

The agreement entered into between the two parties is to support the production of up to 40,000 tonnes of cathode active material on an annual basis, with a definitive agreement set to be entered into once the two parties establish an LFP technology partner to work with the companies for the production of cathode active material.

READ: First Phosphate Produces Merchant Grade Phosphoric Acid In Pilot Program

LFP cathode active material is currently valued between US$12,000 and US$25,000 per tonne, depending on quality and other factors.

A number of items have been agreed upon by the two entities through to 2028, including:

• First Phosphate is to supply raw material and manage logistics for the LFP cathode active material production process.
• American Battery expects demand for cathode active material to begin in 2026, with the need for 40,000 tonnes expected by 2028 at its Tucson, Arizona plant.
• Cathode active material produced will be used by American Battery in the production of battery cells and storage products.
• American Battery will cooperate with First Phosphate in the development of an LFP battery ecosystem in North American, with certain facilities potentially to be located in Quebec.
• If American Battery opens additional manufacturing capacity in North America, it will work with First Phosphate on demand forecasts.

“Raw material bottlenecks, not technology, will be the single largest impediments to the roll out of fully localized LFP batteries in North America. We lean to a sustainable raw materials development partner like First Phosphate that is fully committed to the LFP battery industry as we focus to on-shore our full production of LFP batteries in North America,” commented Major General John S Kem, President of American Battery Factory.

First Phosphate last traded at $0.36 on the CSE.

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