BIFOX and the LFP batteries market

We spoke with our Chief Executive Officer (CEO), Tim Koster, about the value of LFP batteries in market development and the company’s vision for this topic.

What’s your vision of the LFP batteries market?

In a world where we’re urged to reduce carbon emissions, battery electric vehicles could reach a 60% market share by the year 2045. Within that industry, LFP batteries are becoming the preferred technology due to key advantages such as low cost, thermal stability and safety, increased driving range, durability (higher charge cycles), and recyclability, among others.

On a global basis, the main focus today is on how to supply the lithium required for this industry. But we should also pay attention to the development of phosphate rock deposits that could provide a high-quality raw material for this value chain, that requires very low content of detrimental materials. The best phosphate rock for this purpose comes from igneous deposits, which are a scarce resource globally (only around 17% of the total).

Considering that China is the main producer of LFP batteries and cathode materials, what’s happening with the rest of the world?

Well, specifically North America and Europe have a growing awareness of the importance of developing their own LFP battery production and cathode materials, thereby reducing their dependence on China, as currently around 90% of total LFP batteries and cathode materials are produced there.

The extent to which new legislation can incentivize the localized production of LFP cathodes in North America and Europe remains to be seen. We have seen the passing of the Inflation Reduction Act (IRA) in the US in August 2022, which incentivizes the domestic production of electric vehicle batteries and battery components. Similar legislation is being planned for the European Union with the EU Critical Raw Materials Act.

What’s the role of South America in this value chain?

South America holds strategic importance due to its present lithium reserves. The lithium triangle, covering the northern part of Chile, Argentina, and Bolivia, holds around 53% of total lithium reserves.

From that perspective, everyone mainly considers this region as a lithium raw material supplier for the downstream cathode material industry. But this vision could eventually shift if there is a consistent regional supply of other key raw materials required for LFP cathode materials production. For instance, ample iron resources are present in the region, and if igneous phosphate rock deposits could be developed, it would open the opportunity to produce purified phosphoric acid and thus LFP cathode materials. Some Chinese companies like B+D have announced their intention to produce LFP cathode materials in the northern part of Chile.

What’s BIFOX’s interest in the LFP market?

Certainly, we have begun analyzing the LFP batteries market. We anticipate that BIFOX’s future business portfolio could not only be related to the fertilizer industry but also to the fast-growing and high-potential LFP batteries market.

BIFOX has been working for many years to develop sedimentary phosphate rock deposits located in Bahía Inglesa in the north of Chile. Currently, we produce and market highly reactive phosphate rock for direct application as a fertilizer.

We are developing a beneficiation process to increase the P2O5 concentration of phosphate rock to meet international specifications of raw material to supply the fertilizer production industry.

However, in the third quarter of 2023, BIFOX acquired new igneous phosphate rock tenements located in the Chañaral region. This new asset has great potential for the production of high-grade and purity phosphate rock.

Furthermore, we are focused on ensuring that the final phosphate rock produced from this mine can not only be used as a raw material for the fertilizer industry but also to produce purified phosphoric acid, which is, in turn, the raw material required for LFP cathode material production.

It’s clear that we recognize the transformative potential of LFP batteries in the evolving landscape of sustainable energy solutions, and we have a strategic eye on both the fertilizer and burgeoning LFP batteries markets. By diversifying our portfolio and embracing innovation, BIFOX aims to play a pivotal role in shaping the future and contribute significantly to the production of high-quality materials essential for the advancement of clean energy technologies.