Lithium Australia has started small-scale production of cathode materials for lithium-ion batteries.

Its newly acquired subsidiary Very Small Particle Company was now operational and producing lithium-ion battery cathode materials on a “bench scale”, Lithium Australia (ASX:LIT) told investors this morning.

The cathode is used to conduct electricity flows out of a battery or device.

The news comes close on the heels of a history-making deal between Tesla and Kidman Resources (ASX:KDR) – the first Australian miner to do a deal with the American eletric car giant.

Lithium Australia boss Adrian Griffin told Stockhead earlier this week there was “absolutely no doubt” Australia’s lithium miners would see more of these types of deals.

Lithium Australia (ASX:LIT) shares over the past year.
Lithium Australia (ASX:LIT) shares over the past year.

Demand for battery-based energy storage is experiencing exponential growth globally.

The demand is largely driven by rising electric vehicle production and an increase in demand for stationary energy storage systems for domestic and industrial use.

Independent market forecasts conservatively project that demand for the cathode materials in lithium-ion batteries will pass $US10 billion ($13.2 billion) by 2025.

Avicenne Energy predicts the cathode material market will grow to 400,000 tonnes per annum over the same period.

Lithium Australia wants to “close the loop” on the energy-metal cycle.

The company’s disruptive extraction processes are designed to convert all lithium silicates to lithium chemicals, from which advanced components for the battery industry can be created.

Lithium Australia completed the acquisition of Very Small Particle Company in February with plans to re-commission the pilot plant and eventually supply cathode materials to major battery makers.

Recommissioning of the pilot production facilities is at an advanced stage with “wet commissioning” to begin at the end of May.

Wet commissioning involves introducing water or a solvent into the plant.

Lithium Australia says VSPC’s fourth generation lithium-iron phosphate cathode material has received strong interest from international battery makers.

Cathode materials will be available for customer evaluation from September.