Novonix Limited (ASX:NVX) CEO Dr Chris Burns discusses the company’s joint research and development agreement with South Korean battery cell manufacturer LG Energy Solution.
Paul Sanger: We’re talking today with NOVONIX (ASX:NVX), an integrated developer and supplier of high-performance materials, equipment and services for the global lithium-ion battery cell industry, with operations in the US, Canada and Saudi Arabia. The company’s mission is to enable a clean energy future by producing longer-life and lower-cost battery cell precursor materials and technologies. We’re joined once again by CEO Dr Chris Burns. The company has a market cap of $500m and an ASX code of “NVX”. Chris, nice to see you again. Thanks for your time.
Dr Chris Burns: Hi, Paul. Thanks for having me on.
Paul Sanger: Chris, you recently announced a joint research and development agreement with LG Energy Solution, a leading South Korean battery cell manufacturer with two standalone and five joint venture plants currently operating or being constructed in the US. Can you talk us through this transaction and what it means for Novonix?
Dr Chris Burns: Absolutely. We’re extremely excited to formalise our relationship with LG Energy Solution. We’ve of course been working with them for some time around their artificial or synthetic graphite needs within North America specifically. And this relationship has evolved to focus on how we can use this proposed joint research and development agreement to qualify products that meet their specific needs. And, as a part of that, they’re making an investment into NOVONIX of US$30m on a convertible note. And the joint research and development agreement should lead to a proposed offtake for 50,000 tonnes of material over a 10-year period. So, this is really a multi-phase transaction, with the focus being on how we can develop as a long-term supplier to LG’s needs here in North America.
Paul Sanger: Can you give us a little more detail on what the JDA with LG Energy involves, and what are the next steps to formalising a supply agreement with LG?
Dr Chris Burns: We’ve been working with LG and their technical team around their requirements for graphite materials, synthetic graphite material or artificial graphite material. In this case, meaning the same thing, just a nomenclature difference. And their specific requirements — because, again, this is not a commodity product. Every customer of ours has specific needs depending on the cell and the application that they’re developing for. So, we’ve been sampling various grades and material to LG, and the focus of this is how to tune those materials into meeting the specific requirements for LG and develop, improve that through both the pilot and the mass production scale, to then lead to this proposed offtake agreement.
Paul Sanger: And, finally, the next three to six months, what do they look like for Novonix?
Dr Chris Burns: We’ve always said this would be a pivotal year for the company as we last year were selected for the $150m grant from the infrastructure law, and are really focused on our build-out of our next facility, a greenfield site that will have an initial capacity of 30,000 tonnes. This proposed agreement with LG, of course our focus for that facility has been to attract these tier ones that have huge volume opportunities. While the LG agreement has proposed 50,000 tonnes over a 10-year period, LG’s requirements are significantly more than that for their facilities here in North America. So, there’s upside in our ability to potentially scale more volume for LG, but also focus on completing the work around other tier ones and bring more allocation and supply contract allocation into these facilities that we’re looking to build.
And then we’re going to continue our work with the Department of Energy, the loan program office, the grant team through the infrastructure law. And, over the next six to 12 months, we’ll continue to look for announcements around other tier one cell manufacturers or OEMs in our partnerships with them, breaking ground on our next facility, and really outlining that path for the next few years for our anode materials division.
And, outside of that, where so much of our focus is rightfully on the scale-up plan over the coming years in our anode materials division, technology programs coming out of our technology solutions group in Canada continue to be very interesting. Partnership opportunities that we’re pursuing. And, of course, the commissioning of our all-dry synthesis, high nickel cathode line. I think there’ll be really some exciting news hopefully through the course of this year on the technical progress that we’re making and helping define the commercialisation path for that technology, which in its own rights is a huge opportunity for NOVONIX to pursue. So, the next six to 12 months are going to continue to be very exciting for us to crystallise our plans for growth for the coming years.
Paul Sanger: Dr Chris Burns, many thanks for your time.
Dr Chris Burns: Great. Thanks, Paul.
