Lithium Australia (LA) and China’s DLG Battery Co are to form a joint venture to sell DLG’s lithium-ion batteries in Australia— and launch a battery product targeting domestic and global markets.
The 50-50 ‘Lithium Australia DLG’ business will also “fast-track” the commercialisation of cathode powders produced by LA subsidiary VSPC for use in DLG batteries, according to a letter of intent signed by the firms.
The companies have already been testing lithium-iron-phosphate (LFP) cathode powders in China that were produced by VSPC at its pilot plant in Brisbane. The powders were used to manufacture commercial LFP cells in China.
LA has agreed to purchase an initial battery inventory through the issue of 12,500,000 company shares to DLG— at the “prevailing market price of eight (AUD) cents per share”— to help establish the new business.
The partners plan to further develop VSPC’s cathode powders, “with an initial focus on LFP, the ideal battery chemistry for Australian energy-storage applications”. They said LFP “is very safe, not prone to thermal runaway and fires, demonstrates superior longevity and operates reliably at elevated temperatures”.
The joint venture would manufacture packs and modules in Australia, and maintain levels of stock in the country to “ameliorate supply chain constraints” for lithium-ion products entering the Australian market, according to the partners. The business would also produce an “Australian DLG/VSPC battery” for sale domestically and overseas.
DLG will award VSPC preferred supplier status to provide LFP powders for the manufacture of DLG lithium-ion batteries at DLG’s facilities in China “subject to certain performance and cost hurdles being met”.
DLG was launched in Shanghai in 2001. The company is a developer and manufacturer of cylindrical lithium-ion battery cells, packs and systems. The company produces LFP and lithium-nickel-manganese-cobalt (NMC) battery cell types in addition to battery-management systems and pack technology.