Novonix (ASX:NVX) – new manufacturing method for battery materials

Novonix (ASX:NVX) – new manufacturing method for battery materials


Novonix Limited (ASX:NVX) Managing Director Philip St Baker talks about the company's breakthrough dry particle microgranulation (DPMG) method for reducing waste in the manufacture of anode and cathode materials for lithium-ion batteries, restarting of operations in North America and outlook for 2H20.

Rachael Jones: Hello. I'm Rachael Jones for the Finance Needs Network. Joining me today from Novonix (ASX:NVX) is Managing Director Philip St Baker. Philip, welcome back to FNN.

Philip St Baker: Thanks for having me, Rachael. Good to talk to you.

Rachael Jones: You too. Now, Novonix is at the cutting edge of battery technology and storage. Can you tell us more about this?

Philip St Baker: Sure. Novonix is a company with two primary businesses in North America. One is called PUREgraphite, where we are bringing a high-performance battery anode material to the lithium ion battery market, really focused on long-life applications, such as electric vehicles and energy storage for renewable energy.

So, that's one main focus out of the USA. The other one is a business that we run out of Canada, which is a battery technology business, where we sell leading battery testing technology to accelerate battery R&D around the world. And we also provide battery R&D services.

Rachael Jones: Thanks, Philip. Now to your patent for battery manufacturing that has got the market excited, can you tell us what your research partnership in Canada has discovered?

Philip St Baker: Sure. We've got a partnership with Dalhousie University, and specifically it's with Professor Mark Obrovac and his battery research team there. We established this in October 2018. So it's been running for not quite two years. But the team there has done an outstanding job to deliver some really exciting new technology in battery materials and battery materials manufacturing methods.

And the most recent announcement that we made was what we call dry particle micro granulation (DPMG), but, cutting it short, it's a technology that they have invented, and we've filed patents for, that potentially can significantly reduce the cost of battery materials. And this is important because battery materials represent 70% of the cost of the battery. So, inventions that can impact the cost of battery materials can impact the cost of the whole battery industry. And it can impact the adoption rate of electric vehicles and renewable energy.

So, the flow-on effects are huge, and so it's very exciting technology. It's not only potential to lower costs substantially by essentially eliminating waste, but to also do it in a lot more environmentally friendly manner.

Rachael Jones: And given the significance of DPMG, will this require a change to priorities?

Philip St Baker: For us, not really. Our priority is delivering better materials and lowering the cost of the manufacturing of those materials. So this invention is right in line with that focus of our business. So, the priorities are not changed.

Rachael Jones: And you mentioned the growth of the company there, Philip. Can you tell me, how are you funding this growth?

Philip St Baker: Yeah, sure. I mean, we have a number of sources of funding that we've been using up to this point. We raised $5 million in March, so we've just put a recent injection of cash into the company. And given that was right when COVID was announced, we put that money in. The directors, myself, other co-directors and a fund associated with my family basically funded that money, just so that the company can keep going at full pace without delay.

But, going forward, we will have requirements to bring more money in to build the factories, to meet our customer requirements. And we'll be looking to explore all sources in relation to that funding. But we believe debt funding will play a significant role in that because we plan to have multi-year large contracts with global brand names and to underwrite our future factories.

Rachael Jones: And to the last question now, Philip, where would you like to see the company by the end of the year?

Philip St Baker: Yeah, at the end of this year, I would like to see our company delivering new product to our first foundational customer, which is Samsung in Korea. So, they've signed up to buy our new PUREgraphite material manufactured in the USA. So, that's probably the most exciting part, is that we're now producing inventory to meet that contract. First deliveries will commence in October, so that's all very exciting.

We also signed an agreement with Sanyo, who's another major global player in this space, who have large factories around the world, in fact, but also in North America, where we are collaborating with them on a potential supply to them as well.

So, I would look for news around our Samsung contract, delivering to Samsung, and also where we're headed and updates on our collaboration with Sanyo, as a start anyway.

Rachael Jones: It all sounds very exciting. Philip St Baker, thanks so much for the update.

Philip St Baker: Thanks very much for having me, Rachael. Have a good day.


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