Gone are the days of the combustion engine. The electrification of automobiles is here. And with it, a brand new set of opportunities for car manufacturers to explore what is possible in this exciting new industry.
One particular area of fascination is the EV battery market. With the electric automotive industry expected to reach $434.4 billion by 2028, growing 17.5% per year, carmakers are requiring electric batteries for EVs that can replace the traditional automobile gasoline-driven engine.
At this time, producers are having trouble sourcing supplies of battery supplies and are hesitant to search for them abroad, hence they are looking for suppliers closer to home to protect their supply chain integrity.
Interestingly, there is one Canadian mineral development company positioning itself to be the only pure-play publicly-traded company worldwide planning to produce high-grade purified phosphoric acid (PPA) and LFP cathode active material for the LFP battery industry.
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First Phosphate is a mineral development company fully dedicated to extracting and purifying phosphate for the production of cathode active material for the Lithium Iron Phosphate (“LFP”) battery industry.
The company will commence trading on the Canadian Stock Exchange early next week under the ticker symbol “PHOS”.
With over 1,500 square kilometers of royalty-free land claims in the Saguenay-Lac-St-Jean Region of Quebec, Canada, the company has access to some of the rarest rock phosphate (1% of supply) on planet Earth.
These mineral deposits are particularly valuable due to their high concentration of phosphate devoid of harmful amounts of trace elements, a fact that allows the company to develop at a stringent ESG standard.
What is more, the company’s flagship property, Lac à l’Orignal, presents the potential for recovering two additional primary mineral products: titanium oxide and iron oxide.
By possessing these key LFP materials, First Phosphate is building a vertically integrated production plan, with its partners, that includes the extraction, beneficiation, advanced refinement to LFP-grade purified phosphoric acid (PPA), and manufacturing of LFP cathode active material.
These LFP cathode active materials will then be sold to EV battery manufacturers (think of manufacturers like Tesla or Ford), who would integrate them into the battery packs used in their electric vehicles.
You can see below the company’s full integration plan into the LFP Battery Ecosystem of North America:
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Why is Quebec Igneous Rock Phosphate so Rare?
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First Phosphate’s deposits are composed of igneous anorthosite phosphate rock, a rare type of igneous deposit that makes up just 1% of the world’s total known phosphate supply.
Igneous anorthosite is unique because it can be concentrated up to very high purity level beneficiated phosphate rock (40 wt.% plus), allowing over 85% of this feedstock to be converted into LFP-grade purified phosphoric acid (PPA).
Not only that, but igneous phosphate is the only rock phosphate supply capable of meeting the full ESG rigors of the LFP battery industry with full recyclability of the gypsum produced in the purification process.
This is in stark contrast to sedimentary phosphate deposits, which make up the bulk of the world’s phosphate supply (95%), and of which only a small percentage of this feedstock can be converted to LFP-grade purified phosphoric acid (PPA) at a reasonable cost.
Irrespective, sedimentary rock purification produces ESG-incompatible residual waste streams (radioactive gypsum slag piles), whereas the purification of First Phosphate’s igneous anorthosite rock should produce gypsum that can be fully recycled into meaningful byproducts.
This is because igneous anorthosite rock phosphate is low in trace elements.
These byproducts can then be used in various agriculture and construction materials.
In fact, most of the world’s phosphate is dedicated to fertilizer and animal-feed grade phosphoric acid production (Merchant Grade Acid or MGA for short) while only about 10% of all phosphate rock is further refined into purified phosphoric acid (PPA) and used in industrial applications, like LFP batteries.
Given the higher purity of First Phosphate’s igneous rock phosphate, the company can use this advantage to maximize its LFP-grade purified phosphoric acid (PPA) output and to be a consistent and reliable source for purified phosphoric acid (PPA) for the LFP battery industry.
The Growing Demand for LFP Cathode Active in North America
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Beyond its access to rare igneous phosphate rock deposits, Quebec offers First Phosphate many other geographical advantages.
For one, Quebec is a friendly, government-supported mining jurisdiction with excellent infrastructure, and is considered to be one of the main electric vehicle hubs of North America.
Moreover, due to the quality of the igneous rock phosphate found in the Saguenay-Lac-St-Jean region of Quebec, First Phosphate’s purified phosphoric acid (PPA), and hence its LFP cathode active material, will represent a traceable, ethical secure supply source for the LFP battery industry, one that will be compliant with all of the necessary ESG standards.
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As for specific geographical advantages within the Saguenay-Lac-St-Jean Region, First Phosphate’s flagship property is in close proximity to Saguenay City, the 6th largest city in Quebec, and home to a highly skilled industrial workforce.
This helps First Phosphate substantially, as it allows the company to accomplish efficient operations while reducing capital expenditures in the process.
Through the city and the region, First Phosphate gains access to Saguenay’s Deep Sea Port and Airport, which are within driving distance of the mines at just 145 km; First Phosphate also has access to a key clean electrical supply source via Quebec Hydro at Port Saguenay; The production of LFP cathode active material is highly electricity dependent.
Through its location at Port Saguenay, the company also has unimpeded access to import materials and distribute its products to the world, without jeopardizing its costs or carbon footprint.
When analyzing the company, pay attention to the Saguenay-Lac-St-Jean Region as it will be a key contributor to First Phosphate’s growth and development, as well as an important partner in the LFP industry for years to come.
First Phosphate audaciously defines the Saguenay-Lac-St-Jean Region of Quebec as the “Future LFP Battery Valley of North America!”
Finally, there is one more important geographical advantage for First Phosphate.
As a Canadian company, First Phosphate is well-positioned to be a key supplier of purified phosphoric acid (PPA) and LFP cathode active material throughout North America to builders of all types of electric vehicles and other applications requiring LFP cathode active material.
With the demand for purified phosphoric acid (PPA) growing across the globe, and fast, North American businesses are seeking a suitable partner for their LFP battery manufacturing requirements.
According to Fortune Business Insights, the Global Lithium Iron Phosphate (LFP) Battery Market is projected to grow from USD 10.12 billion in 2021 to USD 49.96 billion by 2028 at a CAGR of 25.6%.
Despite these demand drivers coming from LFP batteries, the production of merchant grade (MGA) and purified phosphoric acid (PPA) in North America has continued to decline in recent years.
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As of 2022, almost all of the LFP battery production happens elsewhere in the world, with over 90% of all LFP batteries currently being manufactured in China.
However, amidst greater environmental scrutiny, including the requirements imposed by the Inflation Reduction Act, China’s process is not a viable option for producing phosphoric acid on an ESG level due to environmental considerations, yet it is difficult to find a North American substitute for purified phosphoric acid (PPA) and LFP cathode active material; Supply is tight or non-existent.
First Phosphate gains a significant competitive advantage and moat around its business model given that its mines are located in North America, and its igneous rock phosphate supply is compliant with Inflation Reduction Act requirements and will be able to produce on an ESG level.
So, with almost all of the existing phosphate suppliers in North America focused on producing fertilizer-grade MGA phosphoric acid and not PPA, First Phosphate has a once-in-a-generation opportunity to satisfy the massive needs coming from the North American LFP battery manufacturers.
All-in-all, it appears that the company is in a suitable position to capitalize on this growing industry, largely due to its competitive advantage found in the Saguenay-Lac-St-Jean Region of Quebec, Canada, and its access to the North American market.
First Phosphate’s World-Class Management Team
To ensure that First Phosphate becomes an established producer of high-grade purified phosphoric acid (PPA) and LFP cathode active battery material, the company has assembled a world-class Board, Management, and Advisory team to lead the charge.
CEO and Director, John Passalacqua is an international business strategist with over 35 years of extensive technology and capital markets experience.
In 1998, John gained the title of a top 50 international business strategist on the early internet and has been involved in both private and public market planning for companies in nascent, visionary industries, ever since.
Former Canadian Environment Minister Peter Kent has joined the team as President and fellow Director.
Peter is an accomplished international broadcaster, journalist, reporter, and producer (CTV, CBC, NBC, Monitor, Global), with over four decades of experience.
In 2008, Peter was elected to Canadian Parliament and served in the Department of Foreign Affairs as Minister of State for the Americas, and as Environment Minister.
While in that role, Peter oversaw improvements to the environmental assessment of resource projects and responsible resource development.
With accomplished members like John Passalacqua and Peter Kent at the helm, as well as many others we did not mention, it is clear that First Phosphate is determined to be a key player in this niche market.
Why LFP batteries?
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Some of you may be wondering why not use other types of Lithium-ion batteries instead of LFP.
Well, LFP batteries are unique to this industry in that they offer a variety of meaningful benefits compared to their other lithium-ion battery counterparts and they occupy a special and complimentary place within the lithium-ion battery segment along with their NMC-based peers.
For one, LFP batteries are environmentally friendly and recyclable, containing no harmful metals such as cobalt, manganese, and nickel.
Not only that, but LFPs have well-defined performance capabilities including longer life, greater structural stability, and higher charge/discharge efficiency, among others.
Lastly, LFPs are the lowest-cost battery on the market due to their simplicity to manufacture, which makes them versatile and suitable for various storage applications, meaning that they have a market well beyond the EV market alone.
For these reasons, and with the increasing demand for safe batteries, the LFP battery is an effective complement to the existing NMC chemistries and an excellent solution for an industry with large environmental and ESG aspirations.
Overall, the adoption of LFP batteries is expected to grow significantly in the future, and First Phosphate is positioning itself to be a key supplier in this lucrative market.
Why Should You Consider Investing in First Phosphate?
With demand for LFP batteries growing exponentially and significant tailwinds in the EV market, it is evident that there are many lucrative investment opportunities to be made in this sector.
As the company intends to be the only pure-play publicly-traded company worldwide to focus exclusively on producing high-grade purified phosphoric acid (PPA) and LFP cathode active battery material for the LFP battery industry, First Phosphate represents a great opportunity to be invested directly in this niche market.
Furthermore, since First Phosphate is a North American supplier and committed to ESG practices, you will effectively be investing in a company that is compliant with all of the requirements necessary for producing a high-quality and environmentally sustainable product.
While we covered a lot in this article, explaining the various competitive advantages of First Phosphate, it is important to note that there is more to the story than what is discussed here.
Therefore, if you wish to capture the entire story about the company, and what it has to offer, we highly recommend you check out its website and investor presentation as well.
You can access both by clicking on the links below.
First Phosphate will be trading on the Canadian Stock Exchange (CSE), and is scheduled to be listed by early next week under the ticker symbol “PHOS”.
Disclosure/Disclaimer:
We are not brokers, investment, or financial advisers; you should not rely on the information herein as investment advice. If you are seeking personalized investment advice, please contact a qualified and registered broker, investment adviser, or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Edge Investments and its owners currently hold eighty five thousand seven hundred and fourteen shares in First Phosphate and are compensated for Investor Relations Services, amounting to thirty thousand dollars. Please do your own research before investing, including reading the companies’ public filings, press releases, and risk disclosures. The company provided information in this profile, extracted from public filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it. The commentary and opinions in this article are our own, so please do your own research.
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