Battery materials technology specialist Nano One [TSX: NANO] has commenced a feasibility study for its first commercial plant and has also announced plans for the radical increase in the number of its production facilities.
The new plant design will also form the basis for Nano One’s turn-key Design-Once-Build-Many strategy to address the broader LFP (Lithium Iron Phosphate) market.
The study will provide the company with an optimal production line layout and maximum utility of key equipment. It will also examine a ready to duplicate design, to address a mid-to-longer-term objective of deploying multi-line facilities under license or joint venture (JV) with partners in Asian, Indo-Pacific, North American and European jurisdictions.
Progress at Nano One’s Candiac pilot plant has helped the company de-risk, improve and optimize its One-Pot process for LFP in commercial scale equipment while informing its engineering plans and providing confidence to its collaborators on the long-term competitive viability of its One-Pot LFP technology.
Update on Nano One’s first commercial plant
Through a competitive bidding process, Nano One has chosen BBA to conduct the study which will optimize the plant layout, further refine capital and operating costs and project timelines for the construction of a 25,000 tonne per annum (tpa) LFP production facility.
Denis Geoffroy, Chief Commercialization Officer at Nano One, explained further:
“Our confidence in working with the BBA team is built on a strong foundation based on the involvement of key members of the team in the engineering, design and construction of the Candiac plant over a decade ago when I was the General Manager. More recently, BBA was also involved in the design and engineering of our 200 tpa LFP pilot line which was successfully built and commissioned in Q3 2023. BBA brings a deep expertise in mining, metals, energy, chemicals, power and renewables.”
Nano One looking at potential sites for new plants
As an integral part of its feasibility study, Nano One says it has been in active dialogue with governments and their agencies on key factors that impact its ability to scale-up rapidly and meet market demands. To that end, Nano One has determined that it is in its best interests to consider a broader set of site options that may be more suitable for future growth expansion beyond the first 25,000 tpa capacity plant.
Key considerations include government incentives in the form of grants and forgivable loans, access to sufficient utilities (power, water, natural gas) and location preferences from collaborating stakeholders in the first commercial plant. With the support of provincial and municipal governments in Canada the company has identified potential site options in Québec and Ontario.
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The company says it remains in active discussions with governments at all levels, as well as other strategic partners in 2024 to narrow down its site selection.
Nano One is also closely monitoring government incentive programs in America and with its free trade partners, and has been engaged in conversations with several state and local governments to ensure that it can align business plans and scale-up to meet emerging market needs in the United States.
With an emerging market for LFP projected to be tens of billions of dollars by 20351, the company is addressing this opportunity by aligning its first facility and partnerships to showcase the advantages of the One-Pot process and the speed-to-market benefits of its Design-Once-Build-Many growth strategy.
2024 path to commercialization
The company says it remains well capitalized and is looking to maximize opportunities to secure support from governments. The first commercial plant will require completion of the feasibility study, product validation and customer offtake and feedstock supply agreements. These three items are fundamental for project financing and are a top priority for the company in 2024.
Nano One said it is in active dialogue with government agencies, project finance lenders and strategic partners to secure funding for both its growth activities, first commercial LFP plant and ongoing innovations.
A final investment decision will only be made following the securing of plant specific funding. The company said it is evaluating creative structures together with government incentives to bring One-Pot LFP to market sooner while being cognizant of shareholder’s interests.
In support of its strategic objectives, Nano One will be filing a preliminary base shelf prospectus that will help provide the most flexible and efficient access to capital markets, if and when it is needed. While it has no immediate plans to issue securities at this time, the shelf prospectus, when made final or effective, would permit Nano One to make offerings of various financial securities, up to an aggregate total of C$175 million at its discretion for an effective period of 25-months.
Candiac factory orders confirmed
Nano One has confirmed orders from its Candiac facility for approximately 1.3 tonnes of LFP samples for the purposes of commercial evaluation and collaboration. Sample evaluation by potential off-takers has been positive with a collaborative approach to optimizing Nano One’s commercial LFP offerings.
Building on initial samples sold in Q4 2023, Nano One said there is significant interest in validating its LFP product at scale for future offtake. The decisions to offtake LFP are being driven by advancements at the company’s innovation hub in Burnaby, commercialization hub in Candiac, and electric vehicle adoption policies such as the Inflation Reduction Act (IRA) as well as the equally important energy storage solutions (ESS), for industrial and military sectors.
Further and full automation of the Candiac pilot plant could help it reach up to 2000 tpa capacity and is contingent on initial sales commitments, customer technology validation needs, capital support from government and financial returns. Nano One said it remains positive about potential opportunities in this growing market and believes that a portfolio of customers, both large and small, will help provide the right-sized offtakes to leverage the capacity of its pilot plant, to fill the capacity of a much larger first commercial plant and to secure the necessary project finance.
Nano One’s Design-Once-Build-Many growth strategy capitalizes on both near-term and mid-term market opportunities and enables rapid growth via licensing and joint venture. Its One-Pot process reduces cost, complexity and GHG emissions in the supply chain, while eliminating wastewater, large volumes of challenging sulfate by-products, and the need for intermediate processing in foreign jurisdictions of concern.
Through this combination of compelling enviro-economic value and turn-key deployment, the company is positioned to prudently address LFP’s rapid growth opportunity, capture market share and deliver value to its shareholders, partners and government stakeholders.
