Materials

Move over lithium: This battery technology could be a game changer

Tue 18 Apr 23, 11:34am (AEDT)

HIGHLIGHTS

  • Altech Batteries aims to solve problems with traditional lithium-ion batteries, such as supply chain issues and capacity limitations
  • The Silumina Anodes project coats graphite and silicon particles with high-purity alumina to increase battery anode capacity by 30%
  • The CERENERGY battery technology provides a solution to energy storage and grid requirements during the global transition to renewable energy sources

Traditional lithium-ion batteries have some major problems that Perth, Western Australia-based firm Altech Batteries says it can help solve.

While demand for batteries is set to skyrocket, thanks to the uptake of electric vehicles and the global renewable energy push, supply is hamstrung by supply chain issues.

It is partly because of the heavy reliance on China to manufacture the primary materials used in creating batteries. But it’s also partly on the technology side. Despite the recognition that silicon battery anodes provide around 30% more capacity than traditional lithium-ion anodes, there’s long been an application problem.

These points are emphasised in the following interview with Martin Stein, Altech Chief Financial Officer.

“The problem we’re trying to solve is to get silicon into the battery anode…silicon can hold 10 times more lithium than graphite, but the problem is that silicon swells and cracks when inserted on its own,” he says.

Altech has a potential solution to this via its Silumina Anodes project, which uses a high-purity alumina (HPA) coating in place of the traditional graphite.

Stein also discusses the problem of energy storage, which is magnified as the world seeks to transition from fossil fuel to renewable energy sources.

“Part of the solution is providing storage in battery form, so that the energy can be provided and returned back into the grid when it is at peak and when it is required,” he says.

This is where Altech’s CERENERGY battery technology comes in, providing power at times when the sun isn’t shining and the wind isn’t blowing.

In the following interview, Stein highlights growing recognition of the industry’s potential, underpinned by LG’s recent US$5.5 billion investment in an Arizona, US battery manufacturing facility. He also details the cost advantages of Altech’s technology, the company’s plans to scale-up production, and the large – and growing – user base for its batteries.

Edited Transcript

Ally Selby: Hey, how are you doing? And welcome to Market Index. I'm Ally Selby, and today we're very lucky to be sitting down with the CFO of Altech Batteries, it's Martin Stein.

Martin, thank you so much for joining us today. First up, I want to let our audience know a little bit more about Altech Batteries. I have no idea what they do. Could you describe what the company actually does?

Martin Stein: Good to be here, thanks, Ally. So, thanks for giving me the opportunity, first of all. Altech Batteries is a battery materials and technology company. We really have two main battery projects.

The first one is the Cerenergy Sodium Alumina Solid State Battery Technology, which is destined for the stationary grid storage market.

And the second main project is what we call Silumina Anodes, which is a project that is taking graphite and silicone particles and coating it with a high-purity alumina coating, and we're able to get that into lithium-ion battery anodes. And compared to graphite only, we're getting 30% extra capacity and graphite is the standard for anodes at the moment, so we're trying to provide a better product there to increase electric vehicle battery capacity.

Selby: Is that then the goal of the organisation? Is that the problem that you're trying to solve?

Stein: Well, the problem that we're trying to solve with the Silumina Anodes is to get silicone into the battery anode. So at the moment, the industry is predominantly using graphite, which is great, but graphite doesn't have the same capacity as silicon.

Silicon can actually hold 10 times more lithium than graphite can. But the problem with silicon is that it swells and it cracks if it's put in just by itself. So, the industry is aware that silicon’s a better alternative for the anodes, but they're just trying to solve how to get it into the anode without swelling and cracking.

And that's where our patented Silumina Anodes technology, which is putting the high-purity aluminium nanometer coating over the silicon and the graphite, that's solving the problem of getting it into the anode without swelling and cracking.

Now with the Cerenergy battery technology, that is providing a solution to grid storage, global grid storage requirements. So, as we're seeing the world transition from a fossil fuel economy to a renewable energy economy, we need a ramp up in the production of energy, but that by itself isn't going to solve all the targets and meet all the targets that governments have imposed around the world.

We need to produce the energy, but also part of the solution is providing storage in battery forms so that the energy can be provided and returned back into the grid when it is at peak and when it is required.

For example, solar parks that produce electricity during the day, but the grid requires the power also at night, well, the surplus energy will be put into batteries, grid storage batteries, and then returned to the grid at nighttime. So, the Cerenergy battery is trying to provide part of the solution for the world's grid storage energy requirements.

Selby: Martin, how does Altech stand out from its competitors, both here and overseas?

Stein: I'll talk about our Cerenergy product because that really is a unique technology that we're trying to bring to the market. So, it's a grid storage battery solution, it uses really interesting technology and chemistry, it's actually a battery that runs on salt, so sodium chloride. It uses basic salt, we use some nickel in the technology and we're providing energy batteries solutions using that technology.

So, it's really different to what lithium-ion batteries are doing with their batteries. They're using lithium, copper, cobalt and graphite in their technology. Obviously that has pricing issues. We've seen lithium spike sixfold in the last 12 months.

There's also supply chain risks over the Congo, where 70% of the world's cobalt comes from. And graphite, 90% of the world's graphite comes from China. So, the lithium-ion battery industry will face supply chain and pricing issues.

Our technology, the Cerenergy technology, uses a readily available abundant material in salt, sodium. So we won't be exposed to the rising prices and the supply chain risks that other battery technology, especially lithium, will be facing or is facing, I should say.

Selby: Altech batteries though is still a small cap or a smaller player when it comes to the landscape. What is the current state of play within the battery materials or battery technology industry?

Stein: There's some big investments happening in the industry. Just recently LG announced a $5.5 billion US investment in Arizona, in the United States for a battery manufacturing facility. It's the biggest single investment in batteries in North America. So, there's a huge amount of investment, there's a huge amount of government support, grants and subsidies that are being thrown at various technologies that provide green solutions as the world electrifies its energy.

Selby: And what are the cost differences, both in terms of manufacturing and cost to end user compared to your product that Altech is making and I guess what else is out there in the market?

Stein: We're working through that at the moment. We're preparing a bankable feasibility study that we're aiming to have completed by the end of the year. And that'll tell us more about the economics and the financials behind the project, the 100 megawatt-hour plant that we're building in Germany. Our joint venture partner, which is Fraunhofer, who's a German research and development institute that developed the battery, they've estimated that because we don't use lithium and copper, cobalt and graphite, that the battery technology should be in the region of 40 to 50% cheaper than our lithium-ion competitors.

Selby: Wow. And is this scalable? How quickly could this be put out into mass production?

Stein: The bankable feasibility study is being designed for a 100 megawatt-hour plant and the study will be completed by the end of this year. We'll then look to raise the finance off the back of that, and then start construction of the plant and then produce the batteries. So the scale up in the first instance will be for the 100 megawatt hour plant. But it's important to note that the joint venture with Fraunhofer also allows for continual trains, a second train, so gigawatt factories, and that can be done in Germany or in Europe or in fact, that can be taken around the globe.

Selby: How big is the market for these types of batteries and who are the potential customers?

Stein: We're seeing this industry in its infancy, so it's really exciting to see how big this is going to get. I mean, as I touched on before, the electrification of energy needs a massive scale up, it needs massive investment in it and it needs new technologies to provide the solutions.

We're targeting grid storage, so we're targeting large energy producers, solar parks, wind parks, industrial solutions, that sort of thing. So the market is very big, the market is going to grow and there's going to be a lot of opportunities that come out with electrification of the global energy requirements.

Selby: We understand that independent coverage has been initiated on Altech. What does that actually mean for investors?

Stein: Yeah, we've just released the independent coverage, it's an interesting report. So we're looking at doing an investor roadshow in North America in early May, so we'll be targeting the East coast region of the USA. Arrowhead, who initiated the coverage, is a US based firm based out of New York. It's important that we've got local coverage of our company. It'll give us some presence in North American markets, and then when we do our roadshow in May, it'll help our presence and with getting the story out over there.

The North American market is really important when it comes to grid storage batteries, it's leading the world in the application of it, and there's a lot of investment pouring in to grid storage batteries over there. So, we think that's an important market to understand what we are doing, our unique product, our unique chemistry and the Arrowhead Report is a good start to getting the message across in the North American market.

Selby: Is that because of the Inflation Reduction Act in the US?

Stein: Yes, that's part of the reason. We've had the Inflation Reduction Act that's encouraging investment in green technologies. We've also had recently in the Senate, discussion in relation to US investment, government investment in non-lithium battery technologies. Perhaps they see the importance of securing battery technology that doesn't rely on the importation of all those materials, as our battery uses salt technology, salt's in abundance, it's available everywhere, it's cheap. So, it's encouraging to see the US putting more investment into battery storage and different battery storage technologies.

Selby: I really loved learning about what Altech is doing at the moment, but I want to know what's happening in the future. Do you have any plans or goals over the next few years, where do you see the business going?

Stein: The first step will be to complete the bankable feasibility study on the Cerenergy project. As I mentioned, that's likely to happen at the end of this year. From that point, we will then look to raise the finance to build the plant, the 100 megawatt hour plant. And that finance could come from a number of regions, it could come from grants and subsidies, which are readily available in the EU and in Germany. So, we're encouraged by that, we may be able to attain some finance from there. Also, from the green bond market, we think this project will be green accredited and therefore we'll be able to access green bond finance.

And also through equity means as well.

So we'll finance the plant, we'll construct it as soon as we get the finance together. And then subject to construction being completed, we'll be able to produce the one megawatt hour Cerenergy grid packs and start settling them to customers.

Selby: Martin, you recently announced an exciting new design update to investors on the ASX. I was wondering if you could take us a little bit through that?

Stein: Altech's just announced the design for our one megawatt hour Cerenergy battery. We'll be placing up to 20 60 kilowatt-hour battery packs inside our sea container, a standard sea container, and then we'll be able to track or ship that one megawatt hour battery pack directly to the customer's premises. We'll be able to drop it onto their site.

It's stackable, so we can go up and we can reduce the footprint. And it's a very simple plug and play design, so we can get it installed very simply and within a few minutes, the customer will have access to one megawatt hour of battery capacity at their premises.

Selby: Okay. Well, I've absolutely loved speaking to you today, Martin. Thank you so much for your time.

Stein: It's been a pleasure. Thank you very much.

DISCLAIMER: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Altech Batteries Ltd was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice. Consider consulting a qualified financial adviser before making an investment decision.

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Created By

Glenn Freeman

Tue 18 Apr 23, 11:34am (AEDT)

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