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Nano One awarded US$12m by US Department of Defense for LFP battery work

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Canadian cleantech company Nano One Materials Corp [TSX:NANO / NDQ:NNOMF] has been awarded USD 12.9 million by the US Department of Defense through the Defense Production Act Investments office’s Title III program.

The project will support work underway at Nano One’s facilities in Burnaby, British Columbia, and Candiac, Québec.  It is effective for the period from July 1, 2024 through 2026.

The funds will expand capacity at Nano One’s Candiac location, which is North America’s only lithium iron phosphate production facility. The award is broadly focused on improving energy security by accelerating the formation of a resilient industrial base and LFP battery supply chain in the United States and Canada.

The project also addresses the energy security requirements of the defense sector by supporting product validation and potential sales with customers that include, as previously disclosed, suppliers to the US government.

“Nano One is committed to resilient battery materials supply chains in North America,” explained Dan Blondal, CEO and Founder of Nano One. “These funds build on our existing assets in Candiac and other sources of capital to accelerate our partnerships, sales pipeline and commercialization plans while enhancing value for our collaborators and shareholders. DoD’s due diligence not only confirms emerging market demand for LFP and its importance to a strong industrial base for energy security, but also recognizes Nano One for its deep know-how, its strategic objectives and for the advantages of its One-Pot LFP production process.”

The Canadian government has also recognized the emerging importance of the LFP supply chain by placing lithium, phosphorous and high-purity iron on the country’s Critical Minerals list.

Why Nano One matters to the US government

The global market has seen a decisive shift towards LFP technology.  LFP offers significant advantages in terms of cost, safety, security of supply, and environmental impact compared to traditional lithium nickel manganese cobalt oxide cathode materials. LFP is suited to high-volume, heavy-duty applications in stationary energy storage systems (and electric vehicles.

In China’s local market, LFP batteries accounted for 65% of the country’s total battery output in H1 2023. Globally, China dominates approximately 95% of the world’s LFP production capacity. North America and other jurisdictions are responding to this competitive threat.  They are preparing for similar levels of demand by supporting companies like Nano One and first-of-a-kind technologies that can help establish reliable, secure and independent supply chains.

Nano One’s patented One-Pot process eliminates wastewater treatment and upstream chemical conversion steps by combining the production of precursor CAM (pCAM) and CAM. These innovations drive down cost, energy intensity and environmental permitting challenges at an industrial scale.  They could enable free-trading sources of raw material inputs, and could accelerate the adoption of LFP for stationary ESS and EV applications in North America.

Massive global LFP opportunity

Nano One saw the emerging LFP opportunity in mid-2021.  It began executing on a strategy that led to its pivotal acquisition in Q4 2022, of a 10-year-old LFP production facility in Candiac, Québec and the integration of its highly experienced team. The repurposed plant demonstrates Nano One’s One-Pot LFP process at a commercially valid scale.  Superfluous waste-handling systems at the facility were decommissioned, freeing up space for installation and commissioning of 200 tpa One-Pot reactors.

The Candiac facility is now used to facilitate demonstration, sampling and evaluation.  It also informs FEL design studies and its process engineering design package (LFP CAM Package). It provides a distinct advantage in North America as it can produce cathode materials at commercially relevant scale today.  With the support of these Defense Production Act Title III funds, capacity can be expanded to advance the company’s customer validation, production and technology licensing objectives.

Nano One’s long-range plan is to license and deploy LFP CAM Packages globally and to diversify its revenue streams with licensing fees, engineering services and equipment procurement, and LFP sales from its plant in Candiac. Target licensees include EV, battery and chemical producing companies in the EV and ESS sectors.

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