Small Caps | Jan 22 2018
Lithium battery material provider, UltraCharge, has recently signed up to a deal with Sinochem Lantian involving commercial scale manufacturing of its electrolyte solution.
-Secures manufacturer for key electrolyte
-Strategy to access manufacturing for all three lithium battery elements
By Eva Brocklehurst
UltraCharge ((UTR)) has signed a memorandum of understanding with Sinochem Lantian and caught the attention of TMT Analytics. The deal involves commercial scale manufacturing of the company's electrolyte solution.
The MoU is considered part of a broader move by Sinochem into the lithium ion battery market, while securing manufacturing regarding an important electrolyte element and, hence, UltraCharge's ability to earn royalties from its intellectual property.
While no details were disclosed, TMT Analytics expects Sinochem Lantian to set up manufacturing capabilities and provide the necessary capital. UltraCharge would provide the intellectual property and Sinochem Lantian, one of China's largest manufacturers of fluorine chemicals, is expected to license this, potentially with some form of exclusivity for the Chinese market.
The MoU follows the acquisition of the relevant IP from US company Coorstek Specialty Chemicals regarding electrolyte additives, specifically the electrolyte salt additive, lithium bisfluorosulfonylimide, or LiFSI for short.
Electrolyte salt transports ions between the anode and cathode in lithium ion batteries and many batteries use lithium hexafluorophosphate as an electrolyte. This is unstable at higher temperatures and flammable. However, LiFSI improves the battery cycle life, charge/discharge performance and the cell "bulging" caused at a high temperatures.
The deal means UltraCharge obtains access to commercial scale production capacity for its IP, with the potential to access China's market for electric vehicles. China has the largest number of electric vehicles on the road, closely followed by the US.
The analysts expect China to remain one of the most attractive markets for electric vehicles, and lithium ion battery solutions, given the size of the addressable market and increased emphasis by the Chinese government on clean energy for its cities.
UltraCharge already has access to manufacturing capacity for cathode material through arrangements with BASF and the latest deal, in TMT Analytic's opinion, rounds out its strategy to gain access to manufacturing capabilities for all three elements of lithium ion batteries.
In October, UltraCharge signed a development agreement with US-based Chemours for the expedited development of manufacturing capacity in titanium dioxide nanotubes test materials for anodes.
The deal with Sinochem Lantian is expected to further de-risk the investment case and TMT Analytics reiterates a Buy rating with an 8c target. Sinochem International, a sister company of Sinochem Lantian, recently announced participation in a US$450m project to manufacture 30,000t of synthetic graphite annually for anodes used in lithium ion batteries.
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