Ann: E25 HPMSM project selected for US$166M DoE Grant, page-101

I was wondering if you could have a look at the following information I have researched and perhaps articulate it in a more precise format:

The US Department of Energy (DOE) has many program offices, staff offices and laboratories and technology centres involved in addressing the energy challenges faced

The offices of interest to E25 are the Loan Programs Office (LPO), the office of Manufacturing and Energy Supply Chains (MESC) and the Argonne National Laboratory (ANL) – all under the DOE

The LPO has awarded $billions in loans to be repaid in the development of lithium ion battery pack production plants for electric vehicle manufacturing. These plants are currently in production and more are currently under construction

DOE wants to produce EV’s in America and needs to ensure that the critical materials to supply the battery packs are secured and wherever possible manufactured domestically

E25 applied for the following grant:

The United States Department of Energy’s (DOE) Office of Manufacturing and Energy Supply Chains (MESC) is releasing this Funding Opportunity Announcement (FOA) entitled “Bipartisan Infrastructure Law (BIL) Battery Materials Processing and Battery Manufacturing Grants." This FOA supports BIL Sections 40207(b) and 40207(c).

The mission of MESC is to strengthen and secure manufacturing and energy supply chains needed to modernize the nation’s energy infrastructure and support a clean and equitable energy transition.

Funding Opportunity Overview

Area of Interest 3

Commercial-scale Domestic Processingof Battery Material Precursors

Anticipated Award Size (FederalShare):

$50,000,000 - $200,000,000

Area of Interest 4

Commercial-scale Domestic Manufacturing of Battery Cathodes and Anodes

Anticipated Award Size (Federal Share):

$50,000,000 - $300,000,000

Anticipated Number of Awards: 4 - 8

Area of Interest 5

Commercial-scale Domestic Production of Electrolyte Salts and Electrolyte Solvents

Anticipated Award Size (Federal Share):

$50,000,000 - $300,000,000

Anticipated Number of Awards: 2 - 6

Area of Interest 6

Commercial-scale Domestic Production of Cell Manufacturing for Small and Specialized Markets

Anticipated Award Size (Federal Share):

$50,000,000 - $200,000,000

Anticipated Number of Awards: 2 – 3

The grants were to beadministered by MESC and were based on a report produced by ANL in March 2024that identified shortfalls and challenges with critical minerals supplies.

The report can be found here:

https://publications.anl.gov/anlpubs/2024/03/187735.pdf

Some comments on the reportare as follows:

My comment: This report fromDOE has modelled the lithium ion cell production capacity in the US frompublicly announced investments data – so we have an indication of the number ofcells available up until 2032. The number of cells announced appear to be ableto meet the demand until 2032

The production of keycomponents necessary to build the lithium-ion batteries such as anode material,cathode material and electrolyte, foils and separator materials are far lessthan the cell production capacity

This report (March 2024) thenidentifies the component production short falls and assesses areas where MESCgrants may be awarded.

US CAM production is wellshort of anticipated demand and needs to be increased and also needs to besupported by the commercial scale domestic production of cathode precursors

BATTERY CELL PRODUCTION

This analysis has shown thatcompanies have made aggressive plans for deployment of battery cells,particularly for lithium-ion batteries in North America. From 2021 to 2032, wemodel a 28-fold increase in battery cell production. This production of batterycells is nominally sufficient to meet the demand for a rapidly electrifyingeconomy. However, looking at the production of the components which go intothese batteries, we do observe a shortfall for most of the constituent batterycomponents. Taken on its own, this would lead to the need to import certaincomponents to be included in North American-built batteries.

CAM PRODUCTION

Pages 33-35

The forecast ramp rate forCAM production in the mid-2020s is slower than cell production, and by 2028,503 GWh can only supply less than half of North American cell production

Processing raw materials toserve the needs of precursor manufacturers is a key focus for MESC’s secondround of IIJA Section 40207 grants.

MESC has solicitedapplications for the commercial scale domestic production of cathodes,including cathode materials, powders, and electrodes, due March 2024. MESCanticipates investing between $50 to $300 million per award in four to eightawards for both anode and cathode manufacturing, as similarly described above,with awards completed by January 2025 (DOE 2024). An additional 100 GWh/year innominal CAM capacity has been identified at facilities which are being plannedor considered, but not yet formally announced by companies, further describedin Appendix B Companies are aiming to maximize capacity utilization; Umicorenoted “expansions will be closely matched to the customer volume ramp-uptrajectories”

My comment: there is a bigshortage in domestic CAM production mainly due to the availability of domesticprecursors other than lithium salts – to encourage potential domestic CAMproducers to commit to the construction of new plants a reliable domesticsupply of precursors is required

PRECURSORS

Pages 44-48

Lithium Salts

My comment: Lithium saltproduction for cathodes can be met domestically to meet end of decade forecastdemands – previous grants and loans have been awarded to secure supply by DOE

Sulphates

There is currently verylittle processing of these sulfates in North America, with no known standalonefacility dedicated to its production. To address this gap, MESC has solicitedapplications for the commercial scale domestic processing of battery-gradeprecursors that are fed directly as an input to CAM powders due March 2024.Within this area of interest MESC anticipates investing between $50 to $200million per award in two to four awards that could be completed by January 2025(DOE 2024).

Companies have madeannouncements to have a combined 200,000 tons per year of nickel sulfate,75,000 tons/year of cobalt sulfate, and 120,000 tons/year of manganese sulfateby the end of the decade

9 Li-

	TABLE 13 Companies Producing Metal Sulfates in North America Company	Metal sulfate	Sulfate production (metric tons per year)	Equivalent battery capacity (GWh/year)
1	Vale	Ni sulfate	65,900	32
2	Li-Cycle	Ni sulfate	48,000	23
3	FPX Nickel	Ni sulfate	40,000	20
4	Aleon Renewable Metals	Ni sulfate	36,000	18
5	Stelco / Primobius	Ni sulfate	11,000	5
6	Evelution Energy	Co sulfate	33,000	128
7	Electra Battery Materials	Co sulfate	25,000	97
8	Li-Cycle	Co sulfate	7,500	29
9	Aleon Renewable Metals	Co sulfate	6,000	23
10	Stelco / Primobius	Co sulfate	3,700	14
11	Element 25	Mn sulfate	65,000	260
12	Vibrantz	Mn sulfate	45,000	180
13	Aleon Renewable Metals	Mn sulfate	6,000	24
14	Stelco / Primobius	Mn sulfate	3,700	15

Being recycling processingfacilities, Aleon, Li-Cycle, and Stelco produce multiple products

My comment: Of the 4 listedmanganese sulphate producers listed, the 3^rd and 4^thcompanies are recyclers and currently lack feedstock and their tonnages havenot been included in the 120,000 tonnes per annum forecast. E25’s maincompetitor for a grant is Vibranz which sources it’s Mn from Eramet, a Frenchcompany who operates a mine in **on on the west coast of central Africa. Lastyear **on experienced a short military coup which shut down mining operationsfor 2 days and like most African nations sovereign risk is a factor and is nota good for de-risking supply chains. Vibranz although active in the USmanufactures it’s Mn sulphate off shore and imports it to processors but theymay have plans to incorporate production at one of their US plants – howeverthe location of the mine to source the Mn is still a concern. A search of DOE recordshas not revealed any application for a loan from the Loans Office and itappears they may be intending to use their existing offshore plant forproduction of Mn sulphate and continue to import it into the US. I am not sureif they were invited to apply for a MESC grant as they may not have been ableto meet the eligibility requirements

I cannot find where Vibranzproduce commercial quantities of HPMSM and who their customers are. Theirproposal is for a new pilot plant to be built in Mexico – the wording in someof their presentations is a little ambiguous eg the Mexican plant is currentlyan agricultural grade sulphate producer, “The only experienced Western producerof HPMSM, Vibrantz already manufactures various manganese chemicals at scaleand produces HPMSM at its manganese chemical facility in Saint-Ghislain,Belgium” – this site is an Eramet site and it does not appear that they produceHPSMS at scale but they may have produced laboratory amounts etc

Vibrantz do not appear tohave any offtake agreements in place, do not appear to be intending to produceHPMSM domestically, don’t appear to meet MESC grant requirements and have notapplied for a DOE Loans Office loan

Separators

You may be aware that Entekwas announced as a recipient of an LPO conditional commitment recently (linkbelow) Entek is at the head of the table for separator production – the loancommitment was well outside the scope of the maximum MESC loans that areawarded and a loans office commitment will see the separator shortfallsubstantially addressed

	TABLE 12 Companies Producing Separator for Lithium-ion Batteries in North America Company	Separator production (million square meters per year)	Equivalent battery capacity (GWh/year)
1	Entek	1,420	147
2	Semcorp Advanced Materials	1,100	114
3	Celgard (Asahi Kasei)	550	57
4	Microporous	200	21

https://www.energy.gov/lpo/articles/lpo-announces-conditional-commitment-entek-lithium-separators-build-indiana-ev-battery?utm_medium=email&utm_source=govdelivery

The Director of MESC GiuliaSiccardo participated in a podcast just before the grants were to be announced(which was anticipated towards the end of August 2024) where manganese wasmentioned as a critical mineral :

https://www.mcjcollective.com/my-climate-journey-podcast/giulia-siccardo

Thanks