Avenira’s Wonarah phosphate project.
In two years’ time, Northern Territory-focused Avenira could be one of only three LFP cathode manufacturers outside of China, providing a key battery-grade material for global electric vehicle manufacturers.
“In October 2021, our share price went up 200 per cent within a week, which was when Tesla announced they’d be moving all their standard range vehicles to LFP batteries.”
Brett Clark and his team at Avenira have been building a business model around an integrated supply chain that connects one of Australia’s largest phosphate deposits with an LFP (lithium iron phosphate) cathode plant in Darwin.
Avenira has partnered with Taiwanese battery material pioneer Aleees to plan and design the plant, which is set to be one of only three licensed LFP cathode manufacturers outside of China.
The local and international interest in Avenira’s LFP plant is growing, partly driven by the electric vehicle (EV) sector’s diversification, where EV manufacturers are phasing out the use of NCM (nickel, cobalt and manganese) batteries for standard range vehicles and smaller personal transportation devices like e-scooters and e-bikes.
Clark, Avenira’s chair and chief executive officer, explained in more detail.
“After Tesla, many major vehicle manufacturers in the world, such as Volkswagen, Ford, Stellantis, Mercedes and BMW, announced that they’d be moving standard range vehicles to LFP batteries,” he told Australian Resources & Investment.
“One of the reasons for this was the predominance of EV battery fires in NCM battery EVs. NCM batteries, have thermal stability problems and need to be cooled, unlike LFP batteries.”
While NCM batteries have historically had a higher energy density than LFP batteries, the latter is catching up. Some LFP batteries now reach up to 85 per cent the energy density of their NCM counterparts.
There are other advantages, too.
“From an ESG (environmental, social and governance) perspective, LFP batteries are more recyclable – you’re not recycling cobalt, nickel and other toxic materials,” Clark said.
“They’re also cheaper to manufacture and they have other recharging properties which means you can get about 30 to 40 per cent more recharge cycles from them compared to traditional NCM batteries.”
Clark said Avenira expects the ex-China NCM and LFP cathode market share to be 50:50 by 2030 – insights derived from Benchmark Mineral Intelligence. And there is potential for further growth beyond 2030 as the green transition continues.
Phosphate mining at Avenira’s Wonarah project in the Northern Territory is nearing a trial phase, paving the way for a final investment decision (FID) to be made in the September quarter of 2023. The commencement of DSO (direct shipping ore) mining is planned for the second half of 2023.
The DSO operation aims to ramp up to 40,000–50,000 tonnes of saleable ore product (SOP) per month, with the DSO phosphate product to be sold to a South-East Asian thermal phosphoric acid producer for further processing.
While DSO production is taking place at Wonarah, and Avenira is generating first cashflow, the company will work alongside Aleees to advance the LFP plant in Darwin.
Having released a scoping study for the plant – which demonstrated its technical and commercial viability – Avenira is scheduled to commence the bankable feasibility study (BFS) in the September quarter of 2023. Avenira has appointed leading global engineering firm Bechtel to complete the BFS.
Subject to approvals, Avenira hopes to commence construction on the LFP plant in the second half of 2024, which could allow first LFP cathode production in 2025.
Once production has commenced, Avenira will aim to ramp up the plant to 10,000 tonnes per annum of battery-grade LFP production as soon as possible.
“Depending on how we negotiate offtake agreements and the uptake of those offtake agreements, which could be with a variety of partners, such as EV manufacturers and battery cell manufacturers, we may also decide to commence the second and third LFP trains,” Clark said.
“Each train will add another 10,000 tonnes per annum, respectively, and would commence a few months after the commissioning of each train to keep the construction and commissioning teams running from one train to the next. There’s a lot of efficiencies to be realised around how we schedule that.”
The LFP plant will be further de-risked by the fact it replicates Aleees’ operating LFP battery cathode material plant in Taiwan, on which Avenira and Bechtel completed due diligence in August 2022.
“Prior to 2015, Aleees were the largest LFP cathode material manufacturer globally,” Clark said. “But China has moved ahead massively around LFP cathode production since then through a lot of subsidies and low-entry costs from a capex (capital expenditure) point of view.
“We believe the plant has low technical risk in terms of implementation, commissioning and project development, and will be well suited to Darwin.”
Having achieved DSO production from Wonarah and first LFP cathode production from its Darwin plant, Avenira will then aim to produce a thermal phosphoric acid product from an additional processing facility at Wonarah.
This midstream product will then be used as feedstock for the Darwin LFP plant. Prior to the thermal phosphoric acid plant coming online, Avenira would source thermal phosphoric acid from Aleees’ existing supply chains to feed the Darwin facility.
“The key thing for us as a company is to make a value-added product,” Clark said. “This starts off with direct shipping ore, before moving to an LFP cathode manufacturing facility in Darwin. Then we build out our phosphoric acid process as well.
“So we’re focused on integrating downstream manufacturing and dealing in materials that are going to be in continuous and growing demand in ex-China supply chains.”
Avenira’s aspirations are further supported by a Northern Territory Government that has indicated it is open for business.
“The Northern Territory Government has been proactive in tailoring solutions for companies who want to set up in the Northern Territory,” Clark said.
“Darwin is close to the markets we will ultimately deal with and has great existing infrastructure with rail, gas and port facilities in place.
“Northern Territory energy is also among the cheapest in Australia, and it doesn’t rely on other states providing it, so that adds security.”
Avenira plans to power its Wonarah and Darwin operations on a combination of solar, wind and gas. Above all, onshoring mining and downstream processing practices means Avenira incurs fewer transport and logistical costs, making its integrated LFP supply chain more economical.
“The view that we’re getting from the global markets is that cathode material should be manufactured close to upstream materials, whereas battery cell manufacturers should be close to the electric vehicles and energy storage system manufacturers,” Clark said.
Avenira is building its vertically-integrated LFP operation at a time when geopolitical diversification is key to the success of the global battery supply chain and green transition more broadly.
It’s an operation that showcases the Northern Territory’s business focus and Australia’s rising downstream interests.
This feature appeared in the June–July edition of Australian Resources & Investment.