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Nano One receives $16.9M investment from Sumitomo Metal

Japanese firm takes 5% interest in lithium-ion battery cathode manufacturer

IMAGE: Nano One Candiac Quebec
Nano One's Candiac, Que. facility. (Courtesy Nano One Materials Corp.)

Lithium-ion battery cathode material producer Nano One Materials Corp. has signed a collaboration agreement with Japan's Sumitomo Metal Mining Co., Ltd. (SMM) – which comes with a $16.9 million strategic equity investment.

With that investment, SMM now owns five per cent of Burnaby, B.C.-based Nano One.

“We've been working behind the scenes for years now, trying to find different opportunities to work with them, testing our materials, seeing if there's a cultural and business fit as well. All those check the boxes,” Adam Johnson, Nano One’s senior vice-president of external affairs, told SustainableBiz.

“SMM is kind of a leader in the high nickel cathode space, providing battery materials for the likes of Toyota and Panasonic, through to Tesla. So that know-how and knowledge and network is only going to help us fast track.”

Nano One’s (NANO-T) one-pot process puts the materials needed to produce cathodes, including lithium, iron, phosphorus and carbon, into a single reactor. They are then placed into an industrial dryer and finally, fired in a kiln to create cathode active materials (CAM). Cathodes make up about 25 per cent of a battery’s costs.

The companies will work together to accelerate the commercial production of lithium iron phosphate, CAM and CAM-rich chemistries, such as lithium nickel manganese cobalt oxide (NMC).

Nano One and Sumitomo

SMM is a vertically-integrated miner, refiner and producer of CAM with centuries of history – it was founded in 1590 in Tokyo.

In 2022, SMM expanded its CAM product portfolio to include lithium iron phosphate. The company aims to increase the production capacity of nickel CAM and lithium iron phosphate from approximately 60,000 tonnes per year to 180,000 tonnes per year by 2030.

According to Johnson, 95 per cent of the lithium iron phosphate in the world is produced in China.

“Nano One is also aligned with our belief that less waste and energy intensive CAM production technology is one of the most important keys to contribute to developing EV (electric vehicle) markets,” Katsuya Tanaka, managing executive officer and general manager of SMM’s battery materials division, said in a statement.

“This is particularly important in Japan, North America and other emerging markets where the race to meet net-zero goals and establish battery supply chains is just beginning.”

Nano One plans to use some of the proceeds from SMM’s investment on the conversion of its existing Candiac, Que. lithium iron phosphate manufacturing facility to a one-pot, production-scale pilot plant. Funds will also be used for nickel- and manganese-rich engineering, piloting activities as well as working capital.

The Candiac location has a production capacity of 5,000 tonnes per year – although Nano One is currently targeting 2,000 tonnes per year. The company also plans a full-scale lithium iron phosphate commercial production facility, which will likely be in Candiac as well.

It is nearing completion of a Front-End Loading Pre-Feasibility Study (FEL-2) that will help determine costs, production line size, total capacity and timing.

“If we're assuming that we stay in Candiac on the facility we have, there's only so much room. So that's what FEL-2 is helping us determine – the amount of space we can have, water, power, all those types of issues,” he said. “We're feeling very confident, we think we can go up to 25,000 tonnes per annum on that space."

“We're looking at other options but our strong desire is to stay in Candiac.”

Nano One’s future

The two companies will also jointly look into business development opportunities, including future sales and technology licensing, long-term partnerships and potential investment and financing opportunities to expand operations.

In the future, Nano and SMM may negotiate a joint-venture or licensing agreement for large-scale production of lithium iron phosphate, NMC and other CAM formulations using the one-pot process in Asia – excluding China – as well as Europe, North America and the Indo-Pacific region.

While this is Nano One’s first collaboration agreement with a CAM producer, in June 2022 Rio Tinto made a $13.5 million strategic investment in the company, which gave it a similar five per cent share.

The door is open for Nano One to welcome more investors.

“We are always looking at opportunities to raise capital and find strategic investors,” Johnson said. “We will be continuing to look at upstream, midstream, auto OEMs (original equipment manufacturers) and others to come in as investors.”

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