Lithium Australia has started producing commercial samples of its lithium-ion cathode material for the global battery market.

The lithium producer’s subsidiary VSPC has now fully recommissioned its pilot production facilities in Brisbane and is producing lithium-iron-phosphate battery cathode material.

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

Investors liked the news, pushing the stock (ASX:LIT) up 25 per cent on Wednesday morning to an intra-day high of 12.5c — it’s highest point since May.

The shares have traded between 9c and 26.5c over the past year.

Lithium Australia will use its SiLeach extraction process — which converts all lithium silicates to lithium chemicals — to produce the cathode material, and also plans to use enhanced recycling techniques for battery materials.

Lithium stocks have been under pressure this year.

“Importantly, VSPC will also allow us to capitalise on waste batteries as a feed source,” boss Adrian Griffin told investors.

“We anticipate immense pressure on the supply of energy metals such as lithium and cobalt in the near future.

“Battery recycling not only supports sustainability but may also, ultimately, prove the cheapest source of those energy metals materials in years to come.”

Lithium Australia (ASX:LIT) shares went for a run on Wednesday morning.
Lithium Australia (ASX:LIT) shares went for a run on Wednesday morning.

The news comes a day after the CSIRO said Australia could lead the world in the re-use and recycling of lithium-ion batteries – an industry that will be worth upwards of $3 billion a year by the mid-2030s.

The CSIRO says an effective recycling industry could also stabilise global lithium supplies to meet consumer demand.

Only 2 per cent of Australia’s annual 3300 tonnes of lithium-ion battery (LIB) waste is recycled.

This waste is growing by 20 per cent a year, due to the rapid growth in demand for electronics and electric cars, and could exceed 100,000 tonnes by 2036, according to the CSIRO.

Independent market forecasts conservatively project that demand for the cathode materials in lithium-ion batteries will pass $US10 billion ($13.6 billion) by 2025.

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

Lithium Australia (ASX:LIT) wants to “close the loop” on the energy-metal cycle.

The company completed the acquisition of VSPC in February with plans to re-commission the pilot plant and eventually supply cathode materials to major battery makers.

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

Earlier testing has proven that VSPC’s cathode material is better than the industry standard, according to Lithium Australia.

Delivery of cathode material samples is expected to take place in the final quarter of this year.