Company prioritizing R&D capabilities, as it looks to lead in North American lithium iron phosphate battery materials market
21 December 2023, Israel: ICL (NYSE: ICL) (TASE: ICL), a leading global specialty minerals company, today announced plans to invest $30 million to develop a customer innovation and qualification center (CIQC) in North America, as the company continues to execute on its long-term plan to provide commercial solutions for the energy storage systems (ESS) market in the United States. The CIQC is expected to become a hub for ICL, its partners and its customers, as the company looks to make significant advancements in its battery materials R&D capabilities.
By working with its technology partners, ICL has developed know-how that will allow it to reduce cycle time by 50% and also provide for a significant reduction in power requirements in the production of lithium iron phosphate (LFP). Advancements like these are expected to be amplified, once the CIQC is operational, and the center is expected to be online prior to the company’s 140,000-square-foot LFP battery materials facility, which is expected to produce 30,000 metric tons of LFP annually. The design for the LFP plant has been completed and is currently undergoing a value engineering review to optimize both project costs and schedule, and this includes options for a more rapid, phased approach to production start-up.
The CIQC will allow ICL to accelerate its technology progress, while benefiting ICL battery materials customers, as they look to innovate and advance their offerings. The company is well positioned for growth now that it has already secured its first customer agreement and is working on qualifying additional potential customers’ requirements. The first multi-year relationship calls for ICL to supply LFP battery materials for next-generation battery cell production to a customer in the United States. Beginning as early as 2025, this offtake agreement is for supply of up to 10,000 metric tons annually of LFP material, aimed to comply with the Inflation Reduction Act (IRA), and includes an option to grow the supply relationship.
Demand for U.S. sourced LFP batteries is expected to continue to outstrip capacity, given recent guidance from the U.S. Department of Energy (DOE) and Department of Treasury (USDT) on foreign entity of concern (FEOC) participation and qualification of section 30D clean vehicle tax credit for consumers. The guidance from the DOE limits the participation of FEOCs in the domestic battery supply chain and supports the growth of domestic battery materials processing and manufacturing.
In addition, the USDT and the Internal Revenue Service (IRS) recently issued proposed guidance on section 45X advanced manufacturing production credit to incentivize the production of eligible battery materials components within the U.S. and strengthen America’s energy security, while incentivizing onshoring of clean energy components. ICL believes its ability to benefit from both of these proposals further strengthens the company’s business case and cements its position as the first mover in the LFP battery materials market in the U.S.
“ICL is pleased with the progress we have made with our battery materials business in 2023, and we look forward to meeting growing demand from the energy storage, EV and clean-energy industries for domestically-produced-and-sourced essential battery materials, through our investment in the first large-scale LFP battery materials manufacturing plant in the U.S. and through our customer innovation and qualification center,” said Phil Brown, president of the Phosphate Specialties and managing director of North America for ICL.
“The North American LFP market is expected to see growth exceeding 40% annually until 2030, driven almost evenly by stationary energy storage and automotive electrification. LFP is the core lithium-ion battery cathode material used in stationary storage applications, which are expected to boom in response to the IRA tax credits that can reduce lithium-ion storage system costs by up to 60%,” said Jonathon Wright, partner at Roland Berger. “Across applications, LFP has significant cost, safety and raw material availability advantages compared to the mainstream nickel manganese cobalt (NMC) technologies, with major automotive OEMs recently announcing a shift toward LFP from NMC.”
