Ann: EMH Simplified Extraction Process, page-28

There's lots of interesting comments in this interview.

Commentators have said European manufacturers will be focused on high nickel battery chemistries (eg NMC 811) but Keith speaks of a soft in enquiries back to lithium carbonate and onto lithium phosphate as the interest is in Lithium Iron Phosphate (LFP).

Makes sense with BYD and CATL pushing LFP packs or Made in China EVs into Europe over NMC as ~20% lower cost per kWh at a cell level. The battle for market share is on and manufacturers need to keep costs down to get mass market uptake not just premium end of market.

I found this from S&P Global from 17 March 2021.

"Volkswagen plans to have a unified battery cell starting 2023, employing lithium iron phosphate, or LFP, in entry models; nickel-manganese in volume models; and nickel-rich NCM in high-end models, the German automaker announced during its Power Day on March 15.

This is the first time Volkswagen announced its intention to employ LFP in its own models, and the first announcement of LFP use in the rapidly growing European electric vehicle market."

VWs battery company PowerCo is still clearly the most likely offtaker. From Rueters "VW's PowerCo unit will manage its battery production and research from mining to recycling". Likely PowerCo will be writing the cheque (or Czech) and guiding the EMH horse to water.

It could also put Tesla in the picture as a prospective offtaker for their LFP needs for the Berlin factory (Model 3 and Y). Keith has said preference is for multiple offtakers and I'd agree as you need this to be able to set them against each other to fight for volume.

Still processing "it becomes a trade off for what what price you can sell Lithium hydroxide for compared to what price you can sell lithium sulphate or phosphate for and it may not be the highest grade chemical, the highest grade product that gives us the best economics on the project".

My take - Whilst the vehicle manufacture are still unsure of their battery mix requirements LFP Vs NMC, I would suggest PRODUCTION FLEXIBILITY has an economic value when you are planning to build a US$643.8m chemical plant with a multi decade life.

The challenge for European regulators, who will write the critical metals grant funding guidelines, is that LFP batteries are far less economic to recycle than NMC and the Europeans have already regulated for ~85% recycling rates.

Other points

- DFS timelines out in next 2 weeks
- "that also helps us with lead into formal discussions on financing for the project and on offtake agreements."
-" the idea is when we do release that DFS next year and Final Investment Decision we already have everything else lined up so the project can move ahead as quickly as possible"

EV_RE100