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Battery stock Lithium Australia will pulling the trigger on its German project, which it says is well-placed to tap into rapidly expanding European EV markets.

Lithium Australia (ASX:LIT) plans to be the first integrated Australian battery stock to do everything from mining lithium through to making and recycling batteries.

The company’s SiLeach process converts mine waste to lithium chemicals, before its VSPC solution turns those chemicals into high quality lithium-ion battery cathode materials.

Its recycling tech will recover valuable metals, including lithium and cobalt, from spent batteries.

Lithium Australia reckons it can commercialise its German lithium and tin project, Salidorf, and produce cathode powders for the rapidly expanding European EV and battery industries.

By putting a SiLeach plant at Sadisdorf the company reckons it can “combine low capital intensity with high margins”.

The project could also reduce the European battery industry’s reliance on imported lithium ion battery components.

The company has tested the processes required, and market evaluation on the cathode powders it has produced is ongoing in China and Japan.

These results are enough for Lithium Australia to confidently commit to the next step towards commercialising operations, with a preliminary feasibility study now in the works.

Formal study planning activities will kick off in March 2019, it says.

“Sadisdorf presents a significant opportunity to advance an unconventional lithium resource to the status of a strategic asset,” Lithium Australia boss Adrian Griffin says.

“Lithium Australia is the first company in the world to produce lithium-ion batteries from the types of material available at Sadisdorf, and we look forward to advancing this operation to commercialisation.”

The Lithium Australia share price has taken a hit over the past year.
The Lithium Australia share price has taken a hit over the past year.

Europe is throwing cash at local battery manufacturing

China, then Korea and Japan, currently dominate the production of batteries and battery components — but countries around the world are looking to shore up local manufacturing.

In November, the German government announced a $1.71 billion investment to support its own lithium-ion battery industry, as it looks to catch up with EV and battery cell front-runner China.

Germany is a car-making behemoth, employing about 820,200 people and generating revenues of $665 billion in 2017.

Now, it’s finally making a belated move to protect this industry amidst the disruptive shift away from combustion engines to electric vehicles (EVs).

More recently, France has committed about 700 million euros ($1.1 billion) to produce batteries for EVs over the next five years.