Special Report: A big push by some of the world’s biggest car makers to source battery products from carbon neutral producers has seen one Aussie company brought into the fold.

Talga (ASX:TLG) announced this week that it entered an agreement with Farasis Energy Europe, a subsidiary of Farasis Energy — one of the world’s leading manufacturers of lithium-ion batteries.

Farasis tapped Talga to supply coated (‘active’) anode products for evaluation in the major’s batteries and the pair will assess potential business development opportunities, primarily in Europe.

Farasis was chosen as a sustainability partner by German car giant Mercedes Benz, a division of Daimler AG, as part of the carmaker’s goal to become climate neutral.

Markus Schäfer, member of the Daimler board responsible for corporate research and Mercedes-Benz cars development, said the carmaker could reduce its carbon footprint from future vehicle production by well over 30 per cent by sourcing battery cells from carbon-neutral production.

“The partnership with Farasis Energy (Ganzhou) Co Ltd comprises the production of battery cells produced with electricity from renewable energies as well as the subject of recycling and the observance of human rights in the supply chain.”

Now Farasis is looking at Talga, which plans to be the first and largest battery anode producer in Europe, an emerging electric vehicle (EV) powerhouse.

Talga is a developing lithium-ion battery anode producer in Sweden, utilising vertical integration and wholly owned technology to supply cost-competitive and high-quality anode to European battery markets.

The company’s operations in northern Sweden are to use fossil free hydroelectricity, making it well positioned to capitalise on the increasing push by major carmakers to become carbon neutral.


European battery demand soaring

The COVID-19 pandemic put a dent in supply chains around the globe, making Europe more determined than ever to secure its own battery supply chain and drastically reduce its reliance on China.

And European governments are accelerating their financial commitments into battery projects.

Germany (over $1bn), France ($700m) and Poland ($130m) have all previously announced big cash injections into their respective battery industries.

And those are just individual government initiatives. The European Union has so far dropped in about $US550m ($834.5m), of a budgeted $US88bn, into battery projects, while the European Commission is investing €3.2bn ($5.5bn) in battery research and innovation across Belgium, Finland, France, Germany, Italy, Poland and Sweden.

Europe is undergoing unprecedented growth in the demand for lithium-ion batteries, driven by the move to electric vehicles (EVs) and renewable energy storage.

Global EV battery demand is forecast to grow 14-fold by 2030, which would require about 1.7 million tonnes of anode material each year.

“Talga is making substantial progress in commercialising its European lithium-ion battery anode products, and demand is growing rapidly, particularly in the EV market,” Talga managing director Mark Thompson said.

“Following successful initial tests, we are very pleased to continue this progress in collaboration with the experienced Farasis team.”


Terms of the deal

The two companies will mutually agree on the quantity of lithium-ion battery anodes to be supplied for evaluation.

The agreement is valid until 2024, but it is non-binding at this stage and either party can choose to withdraw at any time via standard termination clauses.

Importantly, Talga’s intellectual property rights won’t be affected by the collaboration.

Talga says it cannot quantify the economic benefits to the company from the agreement at this stage and should commercially binding contracts be entered into the company will inform the market.


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This story was developed in collaboration with Talga Resources, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.