The Rise of The Lithium Iron Phosphate (LFP) Battery
The Conflict Free Battery: The Lithium Iron Phosphate (LFP) Battery
Not all batteries are equal…they each come with their own problems, chemistry and materials. But an alternative battery chemistry can support and diversify a sustainable energy transition
Last April, Tesla announced that nearly half of the electric vehicles it produced in its first quarter of 2022 were equipped with lithium iron phosphate (LFP) batteries, a cheaper rival to the nickel-and-cobalt based cells that dominate in the West.
The energy transition and its push for electrification is revealing the fault lines of global supply chains and the materials that make renewable technology possible. EVs, solar panels, wind technology are mineral and metal intensive in their construction.
The lithium iron phosphate battery offers an alternative in the electric vehicle market. It could diversify battery manufacturing, supply chains and EV sales in North America and Europe.
Breaking A Captured Market
In the global marketplace, there are two main pressures currently influencing battery metal supplies which are the concentration of cobalt supplies in the Democratic Republic of the Congo (DRC) and the market power of Chinese supply chains.
Approximately 70% of global cobalt production occurs in the DRC and it also hosts over 50% of the world’s known reserves. Due to the volatility and ESG concerns associated with labour, the battery industry has been working to reduce the amount of cobalt in NMC battery chemistries.
"The companies that use lithium-ion batteries periodically respond to public pressure about the conditions in cobalt mines by promising to clean up their supply chains and innovate their way out of the problem. There is also a financial incentive to do so: cobalt is one of a battery’s most expensive elements." - Nicholas Niarrchos, The New Yorker
With 80% of the world’s battery grade materials being produced in China and the rise of trade disputes with the West, there has been a recent surge in investments to bring production back to North American countries to meet growing demand.
While there is strong demand for battery materials, the timelines for developing new sources require massive upfront capital costs and time. New mine projects can take up to 15 years to build compared to the short timelines of building a battery factory.
But without the raw materials, there will be few batteries produced at these factories.
This will lead to rising costs of existing material supplies and increased competitiveness of alternate battery chemistries. The financial, human, and environmental cost of battery metals and the need for alternative sources of metals is becoming apparent
Good Chemistry
China dominates over 80% of total battery, but also ~95% of LFP production. In an effort to reduce dependency on battery production in China, and to increase U.S. battery production, battery makers are receiving approvals to build LFP factories in the US.
The U.S. Inflation Reduction Act provides billions in tax credits to boost domestic production of batteries and electric vehicles. This has incentivized firms like Toyota, Honda and Chinese battery producer Gotion to build in the United States. These plans are crucial to the US government’s energy goals and energy security efforts to reduce its susceptibility to trade conflicts and supply shortages.
As the name suggests, LFP batteries contain iron and phosphates which are very common in the Earth's crust. While iron is abundant, North America needs the availability of battery grade purified phosphoric acid (PPA) production which is the key material in LFP batteries.
LFP batteries contain neither nickel nor cobalt. Even if a lithium bottleneck slows production, the battery chemistry remains easier to produce than the NMC (nickel-manganese-cobalt) and offers its own advantages.
Non toxic without cobalt, manganese and nickel
Superior fire safety with much less heat produced
Environmentally friendly and recyclable
Lowest cost battery on the market (simplicity of manufacture)
Longer longer life, lower degradation (millions of miles in some cases)
Higher charge/discharge efficiency (no battery memory)
Consistent discharge voltage
Longer shelf life
Versatile for various storage applications
All this makes LFP a valuable alternative to traditional battery chemistry.
Former Tesla battery supply chain manager Vivas Kumar, is working to build LFP battery materials in California. He said he expected nickel prices would remain volatile because of supply chain dislocations.
"The best insurance policy that automakers have ... is to incorporate more iron-based cathodes in their portfolio…"
The World’s Need Mineral Exploration and New Projects
Technical innovation is not enough to meet the material demands of the future. There is going to be a great need for more mining and mineral exploration. However, not all rocks are the same and it is going to require the right combination of geology, geography, engineering and human skill to bring on new supply.
First Phosphate is a mineral exploration and development company fully dedicated to extracting and refining advanced phosphate material for the LFP battery industry. The company has committed to producing at high purity level, at full ESG standard and with low expected carbon footprint.
First Phosphate has the potential to deliver low carbon LFP grade purified phosphoric acid (PPA) due to the unique geology of Quebec. The company has over 15,000 km2 of claims in a region known for its clean source of igneous anorthosite rock which hosts the phosphate. Only 1% of the World’s Phosphate is found in these types of rocks and First Phosphate sits in the heart of this geological region.
First Phosphate plans to integrate directly into the research & development and supply chain functions of major North American LFP Battery producers that require battery grade phosphate material that emanates from a consistent and secure supply source.
For more information, contact: alp@boraconsulting.ca