Growing Agricultural Demand Buttresses The Growth Of This Crucial Battery Mineral – And Demand From EVs Is Also Set To Grow

Lithium iron phosphate (LiFePO4) batteries, or LFPs, have emerged as an important battery composition that has been gaining increasing popularity in recent years. These batteries are different from other compositions, such as lithium-ion, due to the unique properties of iron phosphate as the cathode material. Unlike some other compositions that may contain cobalt, nickel or manganese, lithium iron phosphate batteries are cobalt-free and possess a lower environmental impact.

The popularity of lithium iron phosphate batteries has grown significantly due to their safety, stability and longevity. They are highly resistant to thermal runaway and have a lower risk of overheating or catching fire compared to other battery types. Because of this, they are ideal for electric vehicle and energy storage system applications. Furthermore, lithium iron phosphate batteries have a longer lifespan and higher cycle life, allowing them to handle more charge and discharge cycles without significant degradation. The reduced need for frequent replacements is a testament to their long-term cost-effectiveness.

The increasing popularity of lithium iron phosphate batteries is reflected in the global market, where there is a growing interest in their adoption. Multiple industries, including automotive and renewable energy, are recognizing the benefits of these batteries and incorporating them into their products and infrastructure. For example, Tesla's TSLA recent shift towards utilizing lithium iron phosphate batteries in their electric vehicles is a testament to the rising prominence of this battery composition.

However, despite the increasing adoption of LFPs, companies and countries have not been as eager to invest in phosphate companies as compared to lithium, graphite, cobalt and other similar miners. For example, earlier this year, GM invested $650 million in a lithium company to help support its battery production for electric vehicles. Analysts have even warned that not enough battery suppliers are securing their supply of the ‘p’ in LFPs, making them vulnerable in the long run.

From an investing standpoint, it would seem surprising that phosphate has not been invested in with the same fervor as other battery material compositions because unlike materials like cobalt, phosphate is a more diverse material because of its application in fertilizer. Simply put, agricultural demand means phosphate demand also arises from a sector that is poised to continue to raise consumption. And when projections show that by the end of the decade, LFPs are projected to be the leading battery chemistry for EVs, replacing their cobalt and nickel-based lithium-ion predecessor, the need for reliable phosphate suppliers cannot be understated. Even as spot prices for battery materials like cobalt may fall, agricultural demand offers some support to the price of phosphate.

Arianne Phosphate Inc. DRRSF is a promising phosphate mining company located in Quebec, Canada. The company’s Lac à Paul project is a response to the growing global demand for phosphate, which is increasing by 2% to 3% each year in terms of agricultural demand and will be considerably higher when LFP batteries are taken into account. The Lac à Paul project is a fully permitted, shovel-ready project.

Arianne’s is a world-class mining site and is the single largest greenfield deposit of phosphate. One major edge Arianne has is the deposit is igneous which allows it to produce a concentrate higher than 90% of the world’s phosphate, which is housed in sedimentary rock. This allows Arianne to produce a high-purity and low-contaminant phosphate concentrate ideal for use in batteries and fertilizer.

But beyond quality phosphate, Arianne also boasts strong community support and adheres to stricter environmental, social and corporate standards. For North American companies that want their suppliers to align with their agendas, Arianne is a perfect partner. 

As North American battery suppliers look to the future, Arianne Phosphate could be a feasible option to help ramp up LFP production. And when it comes to investing in a phosphate supplier, Arianne’s 12-year history and quality mean it stands strong amongst the limited companies in the sector.

Featured photo by Kumpan Electric on Unsplash.

This post contains sponsored content. This content is for informational purposes only and not intended to be investing advice.

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