FULL DISCLOSURE: This is sponsored content for First Phosphate.
First Phosphate (CSE: PHOS) continued its efforts to establish an electric vehicle battery supply chain in North America this morning, signing a memorandum of understanding with Lithium Australia Limited (ASX: LIT).
The MOU outlines the potential development of a lithium iron phosphate and lithium manganese iron phosphate cathode active material manufacturing plant in North America. The MOU follows the development of proprietary tech by LIT for the production of cathode active material, for which it is seeking a partner to assist in commercialization. LIT intends to first construct and operate a demo plant, which is to be followed by a commercial scale facility.
Under the terms of the agreement, First Phosphate and LIT are to work on the advancement of a 250-500 tonne per annum LFP demo plant which is to be based on LIT’s technology, and the parties have also signed an agreement on the joint development and funding by LIT of a full scale commercial plant, which is to be 25,000 tonnes per annum in size or larger, which will serve potential offtake clients. The plants are to be located in either Queensland, Australia, or in North America.
“This agreement could provide First Phosphate with an important technology avenue for the production of LFP CAM for certain clients of LIT and the Company as well as serve as an important offtake for the Company’s future purified phosphoric acid (PPA) production. The potential spodumene offtake that could be contributed into the agreement could eventually provide the Company with access to an important element necessary in the manufacture of LFP / LMFP CAM,” commented First Phosphate CEO John Passalacqua.
The agreement also outlines that LIT is to provide samples of both LFP and LMFP to First Phosphate for the pre-qualification of the cathode active material for First Phosphate’s potential clients, while First Phosphate will provide its PPA samples to LIT so it can determine suitability for the production process. An agreement has also been met on PPA offtake for the two plants, and both parties are able to facilitate offtake discussions with potential clients for the cathode active material.
Lithium Australia currently has an arrangement in place for spodumene offtake from the Lake Johnston Lithium Project, which is owned by Charger Metals and Rio Tinto.
READ: First Phosphate Enters MOU For Lithium Iron Phosphate CAM Manufacturing Operation
The arrangement with LIT follows a similar memorandum of understanding that First Phosphate entered into with Sun Chemical Corporation in late November, which is a subsidiary of DIC Group, a US$150 billion Japanese chemical company. That MOU would also see First Phosphate’s material provided for the production of LFP, and provides First Phosphate with a second technology for the production of LFP as it aims to become a key player within the electric vehicle battery supply chain in North America.
The MOU with Lithium Australia is for a period of two years, and may be extended.
First Phosphate last traded at $0.35 on the CSE.
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