Lithium Australia Ltd (ASX:LIT, OTC:LMMFF) has signed a Memorandum of Understanding (MoU) with First Phosphate Corp. (CSE:PHOS) about the potential development of a lithium iron phosphate (LFP) and lithium iron manganese phosphate (LFMP) cathode active material manufacturing plant in North America.
LIT, through its fully owned subsidiary VSPC Pty Ltd, has developed a proprietary technology for producing LFP/LMFP cathode active material (CAM).
To further this technological advancement, LIT is actively searching for a collaborator to facilitate the commercialisation of its LFP/LMFP technology. This collaboration would involve developing, constructing, and operating a demonstration plant, eventually leading to the establishment of a full-scale commercial manufacturing facility.
“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,” Phosphate Corp CEO John Passalacqua said.
“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.”
MoU terms
First Phosphate is a specialised mineral development firm focused exclusively on extracting and refining phosphate for the production of cathode active material used in LFP batteries. The company is dedicated to achieving high purity levels in its products while maintaining responsible and environmentally friendly practices, with an emphasis on a low carbon footprint.
First Phosphate's strategy involves a vertical integration model, linking the mining source directly to the supply chains of major North American LFP battery manufacturers. These manufacturers need battery-grade LFP cathode active material sourced reliably and consistently.
The company has secured more than 1,500 square kilometres of royalty-free, district-scale land claims in the Saguenay–Lac-St-Jean Region of Quebec, Canada, which are currently under active development.
The properties owned by First Phosphate are characterised by rare anorthosite igneous phosphate rock, known for yielding high-purity phosphate material. This material is particularly valued as it is typically free from high concentrations of harmful elements, making it an ideal source for the production of high-quality cathode material for LFP batteries.
The terms of its agreement with LIT include:
- LIT to provide samples of LFP and LMFP to First Phosphate to enable CAM pre-qualification for First Phosphate potential clients.
- Facilitation of LFP/LMFP CAM offtake discussions for LIT and First Phosphate potential clients.
- Provision to LIT by First Phosphate of PPA samples for suitability in the production of LFP and LMFP CAM.
- Agreement on PPA offtake for the demo plant and commercial plant.
- Advancement of joint development and funding discussions for a 250-500 tonnes per annum (tpa) LFP/LMFP demo plant based on LIT LFP/LMFP production technology.
- Agreement on a joint development agreement (JDA) and associated funding by LIT for the development of a full scale commercial plant of 25,000 tpa or greater to serve LIT and FPC potential offtake clients.
- The locating of the demo plant and commercial plant either in Queensland or in North America.
LIT holds a conditional first right of refusal, enabling it to off-take up to 30% of the spodumene produced by the Lake Johnston Lithium Project. Should a JDA be established, LIT may use its spodumene offtake rights to secure lithium units that would support the JDA.
The Lake Johnston Lithium Project represents a promising lithium exploration venture, situated some 450 kilometres east of Perth. This project is jointly owned by Charger Metals NL (ASX:CHR) and Rio Tinto Ltd (ASX:RIO) (LSE:RIO, ASX:RIO, OTC:RTNTF).
The MoU governing this arrangement has a duration of two years, commencing from the signing date, or an alternative date if mutually agreed upon in writing by the involved parties.