Batteries and Portable Power

Australian Firm to Build Li-Ion Gigafactories in U.S. and Germany

Magnis Resources Limited announced the signing of a MoU for a 30GWh Lithium-ion battery with integrated Lithium-ion battery recycling plant in North Rhine Westphalia, Germany, with the industrialised Emscher-Lippe region.

Magnis also announced that Imperium3 NY, part of a global consortium, in which Magnis is a one third owner, has received funding totaling US$13.25m for Stage 1 production at the New York State Lithium-ion Gigafactory to be located at Huron Campus in Upper State New York.

The German agreement is supported by the North Rhine Westphalia (NRW) government and has been signed by Magnis Resources and Public-Private Partnership (PPP) WiN Emscher-Lippe GmbH (WIN).

Details of the German Gigafactory

The WIN PPP members include Energy and Chemicals giants such as British Petroleum (BP), EVONIK, INEOS, SABIC, SASOL, E.ON, Uniper, RAG and RWE/ Innogy, a number of financial institutions, government entities and economic development entities such as NRW-Bank, NRW.Invest. Thirteen regional municipalities for the economic development of the Emscher-Lippe region an industrialised area in NRW, are also members.

With a population of 17 million and having US$800 billion GDP, the Federal State of NRW, is Germany's largest Federal State and the largest industrial activity center within Europe. Two sites have been shortlisted with the necessary infrastructure to provide advantages for Lithium-ion battery production.

Key Terms of the Development Agreement

Under the Agreement, a 30GWh Lithium ion battery manufacturing with integrated Lithium-ion battery recycling facility will be setup in NRW. The battery manufacturing plant development will be an integrated facility aimed at achieving the most sustainable supply chain solutions and include product qualification, quality control and close loop on site recycling.

The Emscher-Lippe region has a strong industrial basis with one of the largest energy-chemicals clusters in Europe and there is existing infrastructure in place to house future industries such as the proposed gigafactory.

The development of new industries, such as battery manufacturing, is regarded as an essential prerequisite for future employment and economic activity in NRW, especially in the Emscher-Lippe region. This would be a gain for the existing automotive industry and in the new industries that include renewable energies and consumer technologies.

Magnis will be responsible for sourcing raw materials and associated technologies. With its partners, Magnis will assist with general project development and management of the project.

The automotive industry is critical to the German economy and electromobility is a major target market for the project. Germany is also leading the world in the transition to renewables, with over one-third of electricity generation now from renewables. Such a high proportion of intermittent renewables is starting to impact grid stability and hence stationary energy storage is another key target market for future production.

Meetings have been held with groups in the target markets based in Germany who have expressed interest in potential offtake and co-operation with more information expected in the near future.

Director of WIN, Peter Karst commented: "We are very encouraged about the potential for this project. WIN has deep expertise and the manpower to ensure that this project will be a success. We look forward to working with the consortium."

Chairman of Magnis, Frank Poullas added: "We are very delighted to be involved with a major role in this German Lithium-ion gigafactory and Lithium-ion battery recycling plant in NRW. From day one, we have had the co-operation from the NRW government along with our partner WIN."

"Having the access to potential cluster synergies with the locally operating companies like BP, EVONIK, INEOS, SABIC, SASOL, E.ON and RWE/ Innogy, all established leaders in their respective industries, is quite remarkable and a very strong vote of confidence to exploit the specific advantages of this specific region and cooperative concept."

"With funding from New York State for the New York Lithium-ion gigafactory announced yesterday, coupled with today's announcement, Magnis is in a very strong and enviable position to be a leading player in the Lithium-ion battery revolution."

Chairman of Allocate, a partner to the project, Dr Jorg Fabri commented: "We are establishing a German based entity with specific expertise in both the battery business but also in industrial clusters which will manage the next steps of the project development, with a focus on the exploitation of the very specific synergies and advantages of this industrial cluster environment."

To date, a scoping study has been completed highlighting the financial viability of the plant with a feasibility study to commence in Q4, 2017. Additional consortium members and partners are expected to be announced in the current quarter.

U.S. Gigafactory to be in New York State

The U.S. announcement was made by the Governor of New York Andrew Cuomo at a press conference held at the location of the New York Lithium-ion battery gigafactory, Huron Campus.

Magnis' Chairman Frank Poullas commented: "Today's announcement is a significant milestone for the New York consortium and more specifically for Magnis' shareholders, as progress is made one step closer towards Lithium-ion battery production at the Huron Campus."

"To have the support of the Governor Cuomo and his Government after an extensive due diligence process shows the true merits of this project. New York State accounts for approximately 10% of the GDP for the whole of the United States with an economy that has a larger GDP than countries including Australia and South Korea."

"Through the consortium and partners, we have the technology, skills and resources to make New York's first Lithium-ion Battery Gigafactory a huge success. We would like to thank the New York State Government for its ongoing support."

A Joint Manufacturing Establishment Agreement was signed for a 15GWh lithium-ion battery plant as announced on 22 May 2017. The agreement was signed by Magnis, Charge CCCV (C4V), Boston Energy and Innovation, C&D Assembly and Primet Precision Materials.

Over 25 international companies are undergoing qualification process as strategic suppliers of critical ingredients for Lithium-ion battery cells including raw materials, electrolyte and separator.

The recent completion of the scoping study priced the capital costs for Stage 1 at US$130m, with an expected first production date in the second half of 2019. First stage production will be at 3GWh with an aggressive ramp up to 15GWh.

The detailed engineering contract for stage 1 is expected in the current quarter with groups shortlisted all having extensive experience in the Lithium-ion battery industry.

Using its innovative technology and industry experts, the batteries to be produced by the consortium have been qualified as safer, more efficient and less expensive. The consortium is currently producing batteries in a Megawatt scale facility, mainly for product evaluation, supplier qualification and system level performance validations.

An experienced team has been assembled to lead the project with key members having previous experience working in the production of Lithium-ion batteries for one of the global leaders from Korea and an Auto manufacturer from the US.

The general market for Lithium-ion batteries continues to grow rapidly with announcements by current and future end-users being made on a regular basis. The target markets identified for Stage 1 production following end user discussions include Electric Vehicles, Stationary Energy Storage, consumer electronics and niche products.

Under the 50by30 program, New York's utilities and other electricity suppliers are required to obtain 50% of New York's electricity from renewables, which would require many GWh of annual storage to make it possible and this gigafactory will play a large role in meeting New York State's internal demand and allowing them to achieve this goal.

Today's announcement also builds on the significant work being done by the consortium in New York State with funding and offtakes.

Receiving the support from the New York State Government is a key milestone for financing the project. Discussions have been very positive to date on the remainder of the funding and these discussions will continue with Magnis updating the market accordingly. A signed term sheet is expected in the current quarter with serious interest being received in the US.

Magnis Resources Limited
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