Global specialty minerals company, ICL Group (NYSE: ICL) (TASE: ICL) has started groundwork on what will officially become the first large-scale lithium iron phosphate (LFP) facility in the United States, following an investment of $400 million, which was supported by a $197 million grant by the U.S. Department of Energy.
The new St. Louis, Missouri-based facility will become operational by 2025 and is set to help meet the growing demand for American-produced and imported essential battery materials.
In recent years, sectors such as electric vehicles (EVs), clean energy, and energy storage have witnessed soaring demand, as public and private industries move to adopt more sustainable energy alternatives against the backdrop of climate change concerns.
More than this, in August 2022, President Biden introduced the landmark Inflation Reduction Act (IRA), a federal law that aims to curb inflationary pressures on the American economy, decreasing the cost of prescription medication, and boosting investment in domestic energy production, and further promoting clean energy.
The new St. Louis facility will become a leading example of domestic LFP production, further bolstering the economy through job creation and ongoing investment in domestic energy production and clean energy research.
The company behind the investment, ICL Group, is a leading specialty minerals company that focuses on leveraging unique bromine, potash and phosphate resources to create solutions for challenges experienced in the agricultural, food and industrial markets.
U.S. Secretary of Energy Jennifer M. Granholm told reporters at the event that “President Biden’s Investing in America agenda is providing historic funding that will bring down energy costs for electric vehicles, create good jobs, and keep the U.S. on the cutting edge. The momentous groundbreaking of ICL’s battery materials manufacturing facility in St. Louis is part of a manufacturing renaissance to build our country’s supply chain for these clean energy products.”
It’s expected that once the 140,000-square-foot facility is completed, that it will produce roughly 30,000 metric tons of LFP, serving as the foundation for the company’s global battery materials operations.
President of the company’s Phosphate Division and managing director of North America for ICL Group, Phil Brown further reiterated that “ICL is excited to be building the first North American, commercial-scale plant for this critical component required by the energy-storage, mobility, and infrastructure end-markets, and we’re proud to make this investment in St. Louis and to create more than 150 high-paying union and professional positions in St. Louis.”
As part of the development, the plant will be located on the existing ICL Carondelet Campus, which has been identified as a disadvantaged community by the Justive40 Initiative.
ICL has opted to partner with St. Louis-based McCarthy Building Companies to act on behalf of the general contractor for the project. Once the ground has been broken, the project is set to create between 800 and 900 union construction jobs, becoming a major economic injection for the St. Louis community.
Furthermore, ICL has said that it has decided to partner with well-known Taiwanese-based Aleees, an established LFP battery manufacturer and global IP licensor to assist with the establishment of integrated and sustainable LFP supply chain solutions for its American customers.
This would help the company to further highlight its commitment to boosting the American LFP battery manufacturing industry and also boost investment opportunities for research and development in the battery industry that services a growing number of businesses.
Demand for lithium iron phosphate (LFP) batteries has soared in recent years, as automakers worldwide are racing to electrify their new vehicle line-up. Data published by the International Energy Agency (IEA) found that American EV maker, Tesla, accounted for 15% of LFP chemistries demand, globally. Between 2021 and 2022, the car market witnessed the share of LFP batteries used in their vehicles grow from 20% to 30%, respectively.
However, 85% of cars manufactured by Tesla with LFP batteries were produced in China, and the remainder in the United States, with cells imported from Chinese manufacturers. The IEA found that a mere 3% of electric cars that comprise LFP batteries were manufactured in the United States last year.
New facilities, such as the one now under construction in St. Louis would help to reduce American car makers’ need and reliance on foreign LFP batteries and cells, helping to increase the scope of domestic production, and potentially further driving down production costs for manufacturers, and sticker prices for consumers.
With the LFP industry set to experience rapid growth in the coming years, against the backdrop of soaring electric vehicles and clean energy demand, ICL’s investment would only further help bring more innovative solutions and the expansion of industry-based research to the American market.
