ASX-listed junior Lithium Australia has mounted a friendly takeover of a Brisbane-based producer of high-quality cathode material for the rechargeable battery market.

A cathode is one of the three key components in a battery, along with an anode and electrolyte.

Speaking at the Mining 2017 Resources Convention in Brisbane, Lithium Australia (ASX:LIT) managing director Adrian Griffin said the company had acquired Very Small Particle Company (VSPC) which produces lithium iron phosphate (LFP) for use in rechargeable batteries for electric vehicles.

VSPC had spent $30 million on research over the past ten years in the production of LFP.

“We hope to complete the transaction, pick up control of the company at a very good price, re-commission their pilot plant which is based here in Brisbane so as to get back into producing the world’s most advanced cathode materials,” Mr Griffin said.

Mr Griffin said the technology under development by VSPC was mind-blowing but remarkably simple.

“This company provides innovative, patent-protected chemical processing to deliver those sorts of materials into the cathode industry. That ultimately fast-tracks us to commercialise cathode production for the battery industry,” Mr Griffin said.

“Our plan is to put metals back into the battery industry.”

Perth-based Lithium Australia, which entered a trading halt yesterday pending announcement of the acquisition, seeks to produce lithium chemicals on a commercial scale and at an operating cost in the lowest quartile.

To achieve this, the company is acquiring access to feed materials with low exposure to mining costs, processing materials, developing strong strategic partnerships and maintaining equity in resource projects globally.

The company is pilot testing its SiLeach lithium extraction technology, resulting in the production of battery-grade lithium carbonate.

Lithium Australia has also completed engineering studies for a large-scale pilot plant capable of producing 2500 tonnes of lithium carbonate annually.

The studies have shown that SiLeach provides a competitive alternative to other battery-grade lithium processing methods.

Prior to entering a trading halt, the company was trading at 12c, valuing the company at around $40 million. Lithium Australia has $2.55 million in cash.

Vertical Events’ premier flagship event, the Mining 2017 Resources Convention, is being held at the Brisbane Hilton on August 29 and 30.