Your browser is not supported. Please update it.

2 June 2022

Canadian start up licenses cathode shortcut to BASF, buys factory

We have heard a lot about lithium ion cathode production from a variety of sources over the past two years, and how it can be steeply cut in both costs, time to market, and wasted components – Tesla’s Elon Musk has made public statement about it, and the LFP community as far and wide as China has talked it up, and this week tiny Canadian start up Nano One Materials, has emerged into sunlight, with patents and an exploitation deal with global chemicals firm BASF.

The moves comes less than a week after Nano acquired an LFP factory from Johnson Matthey, which sold the rest of its lithium ion business to a BASF rival EV Metals Group, a London based metals firm, which will exploit a slightly different Nickel process improvement itself.

In November last year UK metals specialist Johnson Matthey announced it would get out of the lithium-ion Battery Materials (JMBM) business – after it spent $200 million chasing it as one of the possible successor businesses for its core catalytic converter business, and chasing falling prices in the battery sector. JM was developing a nickel-rich cathode material called eLNO and at the time valued the business at $450 million, but has now sold it off for £50 million.

But its Battery Materials arm in Canada was acquired for C$10.25 million about 25% of the cash in Nano’s bank, at around C$46 million. The deal includes the existing team, facilities, equipment, land and other assets and Nano says that it gives it room to scale its process and still have plenty of spare factory space.

JMBM Canada also includes a 2,400 ton annual LFP production facility in Candiac, Quebec occupying 10% of the 400,000 square foot property.

This deal was obviously a precursor to the larger deal with BASF, which will now see a long term evaluation of the M2CAM process designed by Nano One.

Battery cathodes make up around 42% of a lithium ion battery’s costs, and at present the lithium carbonate is mined, refined, turned into sulfates, converted to lithium hydroxide using a milling process and several days in a furnace. The remaining sulfates are then thrown away. The Nano is called Metal Direct 2 Cathode Active Material, and the process cuts out the bulkiness of what is shipped, cuts down the heating process to a few hours, and uses no sulfate, and 20 times less water, and results in a pure crystal lithium cathode powder in a fraction of the time and with a fraction of the energy usage.

The first time we heard this was a couple of years ago from a rival firm, but as far as we can see, that company never got its funding and is still looking. Nano came out of stealth a year ago, and will now work with BASF to build a what it calls a “one pot process” for making cathode materials in a multi-phased Joint Development Agreement (JDA) deal which includes a detailed commercialization study for pre-pilot, pilot and scaled up production.

It looks like Nano has managed to avoid the huge mistake of getting itself into the manufacturing business, and will be using a licensing process to take revenues directly from the money it saves BASF. BASF is a Germany multinational chemicals firm, which says it is one of the largest suppliers of process catalysts in the world and is expert at efficient production of a wide variety of chemicals, including advanced battery materials.

BASF’s HED (High Energy Density) product family includes a series of high energy density cathode active materials for lithium-ion batteries with a very high degree of purity. If the two manage to specify a completed new process, it will have a home in most mature battery markets globally overnight.

The big problem with deals such as this, and the reason smaller firms hate entering into such a deal, is because the bigger company simply assumes that it already knows best, and refuses to rethink its processes adequately.

Let’s hope that Nano has a way out of this, if that happens.

Dan Blondal, Nano One CEO, said: “BASF is a global leader in chemistry and high performance lithium-ion battery cathode materials, and we are proud to be forging new ground with Nano to improve performance, cost and environmental footprint for CAM production. There is a tremendous opportunity to jointly differentiate the production processes and products  for a more resilient and sustainable supply chain. We look forward to advancing this partnership.”

Meanwhile the Johnson Matthey deal in the UK almost creates another rival for Nano overnight. It includes assets from the Battery Technology Centre in Oxford and its UK pilot plant and the partly constructed manufacturing site in Poland and it will start with Johnson Matthey’s eLNO technology, underpinned by the GEMX and CAM-7 cathode platforms that the company licensed from CAMX in the US which have already been licensed to Samsung SDI and LG Energy Solution for Nickel based cathodes.