Funding boost charges up Australian battery innovation

Australia could become a competitive supplier of next-generation batteries after a Queensland company secured $30 million to establish a manufacturing facility.

Brisbane-based firm VSPC announced plans to create the production line on Thursday, potentially helping Australia compete with China for the lucrative supply of lithium-ion batteries.

The facility, which will be established and operated for two years at a cost of $60 million, will be designed to produce 250 tonnes of cathode powder each year.

The Australian Renewable Energy Agency (ARENA) will provide $30 million towards its establishment following an independent technical assessment of the company's plans.

VPSC, also known as the Very Small Particle Company, is owned by battery recycling firm Livium and plans to produce lithium ferro phosphate - a critical material for lithium-ion batteries.

The company's unique approach to its creation could make the devices cheaper and cleaner to produce, ARENA chief executive Darren Miller said, and help to make Australia more competitive in the market.

"As global demand for energy storage rises, domestic advancements in cathode power could position Australia as a leader in advanced battery manufacturing," Mr Miller said.

"If the project is successful, it could help catalyse competitive manufacturing of cathode powers and help diversify supply chains."

China is responsible for almost 85 per cent of the world's battery cell production capacity, according to the International Energy Agency, and more than half of global lithium and cobalt processing.

Livium chief executive Simon Linge said establishing the production of battery materials in Australia would let the nation compete with China and also supply batteries needed to store renewable energy onshore.

"This grant from ARENA represents a significant step forward for our battery materials commercialisation," he said.

"The demonstration plant ... seeks to unlock a patented technology and advance western (lithium ferro phosphate) supply chains which will ultimately seek to increase access to high quality cathode materials."

The facility, which is expected to be established in less than two years, will create commercial samples of the cathode powder for investors and scale up its production over time.

At full capacity, Livium estimates the facility could produce battery materials worth more than $500 million a year.

The global battery market is valued at more than $300 billion, according to Statista, and is expected to grow by seven times between 2022 and 2030.

Lithium-ion batteries are used to power everything from electric vehicles to large-scale energy projects, as well as household devices such as laptops and smartphones.