NOVONIX Group (ASX: NVX): Battery Materials Development and Advanced R&D and Testing Solutions for Lithium Ion Batteries, Interview with Dr. Chris Burns, COO
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 6/8/2020
We learned from Dr. Chris Burns, COO of NOVONIX Group (ASX:NVX), that they are focused on battery materials development and advanced R&D and testing solutions for lithium ion batteries, particularly in the energy storage sector that requires advanced materials, with extremely long cycle lives that can be produced at low cost. The Company's R&D center, Novonix Battery Testing Services, is located in Halifax, Nova Scotia. The Group's anode production plant, called PUREGraphite is located in Chattanooga, Tennessee. It is the first North American company to land a supply contract, with a major cell manufacturer for battery graphite, and will be supplying synthetic graphite anodes to Samsung SDI, starting October this year. According to Dr. Burns, NOVONIX's short term goals, for the coming years, are to continue to grow the production capability and sales and revenue, within PUREGraphite, as well as through R&D, developing new technologies that can be applied outside of anodes, including electrolytes and cathodes (such as NMC or NCA type materials).
Dr. Chris Burns, COO of Novonix Group.
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Dr. Chris Burns, who is COO of Novonix Group. Could you give our readers/investors an overview of your Company and also what differentiates your Company from others?
Dr. Chris Burns:Novonix is a group of companies with two operating businesses in North America. We have our research and development center, Novonix Battery Testing Services in Halifax, Nova Scotia and we have our anode production plant in Chattanooga, Tennessee that goes under the trade name of PUREGraphite. Novonix is focused on battery materials development and advanced R&D and testing solutions for lithium ion batteries, and primarily targeted at the growth in the EV and energy storage sector that require advanced materials with extremely long cycle lives that can be produced at low cost.
Our production center in Tennessee, PUREGraphite, is really the first opportunity that we have developed of a commercially ready material to provide the lithium ion battery market with a supply chain option outside of China. PUREGraphite is currently scaling production of our synthetic graphite anode product to meet the demand of a contract that we have with Samsung SDI. This is one of our differentiators. We are the first company we're aware of to supply one of the major five battery manufacturers, with battery active materials that are coming from the United States, especially graphite. We will start shipping product to Samsung SDI in October to meet our contract requirements with them.
Another unique aspect of our Company is how we approach our research and development. Our battery testing services business in Halifax, Nova Scotia is where we conduct a lot of our advanced research and development. We have a partnership with the university, who works on new materials development, including things within the scope of graphite that we're looking at with PUREGraphite, beyond that to cathodes, silicon material and solid state batteries. Internally within our business, we provide testing services and solutions to companies, global Tier 1, consumer electronics and auto OEM, and cell manufacturers with our pilot line facility to build cylindrical and pouch format cells, as well as our unique, high precision coulometry testing, which allows us to do rapid research and development and get results about battery lifetime in weeks instead of months or years.
Novonix is a very uniquely positioned Company, looking to grow businesses, within the battery materials supply chain, and PUREGraphite is the first of those businesses.
Novonix Battery Testing Services Inc.
Dr. Allen Alper: That sounds excellent. Could you tell us a little bit more about your testing technology?
Dr. Chris Burns: Our testing technology of high precision coulometry is a technique that we pioneered with Dr. Jeff Dahn at Dalhousie University, starting in 2008-2009 and through all my graduate work with Dr. Dahn into the formation of Novonix. We were showing that we could test battery performance more accurately than anything else available on the market, which allowed us to measure the stability of the chemistry, within those batteries, to the tens of parts per millions efficiency level of accuracy. That, in turn, let us make measurements very quickly and determine, in only a couple of weeks, how stable the battery chemistry was. When looking at batteries that require lifetimes of 10-plus years, this is critical.
We started this project when we saw the transition from consumer electronic applications, which require only maybe up to a five-year lifetime to the fact that lithium ion batteries were going to be used in EVs and energy storage systems, which, of course, we see proliferating now. We needed a way to be able to iterate on new materials development more quickly, and our high precision coulometry or HPC systems allow us to do that. We started Novonix, in Halifax, around that testing technology and supply it to research organizations, auto OEMs, consumer electronics OEMs, and cell manufacturers around the world. All major players in this industry are using our equipment because it's giving them an edge in their R&D.
Dr. Chris Burns: For example, cell manufacturers like Panasonic, CATL, Samsung SDI, SK, and now LG are all using our equipment, as well as leading auto OEMs and consumer electronics OEMs, with whom we have a number of NDAs in place, some of which we can't discuss.
Dr. Allen Alper: Well, that sounds great. Could you tell our readers/investors your goals? What is your vision for the Company?
Dr. Chris Burns:Novonix strives to be a materials provider in the battery supply chain. Our goals now are focused on scaling our PUREGraphite business, supplying synthetic graphite anode product to Samsung SDI. And we've been working with Sanyo and have an MOU in place to further our testing program, in an effort to move toward a supply contract, and a number of other manufacturers. So our short term goals are to continue to grow the production capability and sales and revenue within PUREGraphite over the coming years, as well as through our research and development. In recent announcements, we've showed that we are developing new technologies that can be applied outside of anode, including cathode, the manufacturing of NMC or NCA type materials. And we're looking at those as new opportunities for us to build new companies, to continue to support the need for a battery materials supply chain outside of China. That is really our goal, to build a supply chain for battery materials outside of Asia, to support the growth of battery manufacturing that's now in the United States and Europe.
Dr. Allen Alper: Well, that sounds great. Could you tell our readers/investors a little bit about the battery market and how it's growing, and also the storage part of the market?
Dr. Chris Burns: The battery market, as everyone is seeing, is gaining traction very quickly. The most exciting part about it is that growth in the lithium ion battery market, over the past 10 years or so, has come from the proliferation of consumer electronics devices and small-scale devices, where everything has a battery in it now. Right? Phones, laptops, tablets, you name it. The exciting part about the growth in the industry is that it's going to be driven by electric vehicles and energy storage systems. The requirements for those vastly outweigh the requirements for the growth in the consumer electronic sections, and that's even with modest adoption targets.
The growth is huge. I know in the United States, there are plans to install about 130 to 150 gigawatt hours of capacity in the next two years. And if you look at the Tesla Gigafactory in Nevada as an example, it's about 30 gigawatt hours of capacity spec to build a half million electric vehicles a year. So this is positioning the United States to be able to build on the order of 2 million-plus electric vehicles a year, but, of course, some of that will go to energy storage systems and other markets.
But what's very important to understand about that growth is that those batteries have the highest requirements, the strictest requirements for performance, because again, consumer electronics only need a lifetime of a couple years. And if something happens with your phone battery, you can just get a new phone. If you buy a Tesla Model S, for example, for on the order of $100,000 and the battery fails in only a couple years, that is completely unacceptable in supporting electric vehicles adoption and energy storage system growth. Where we see the future for Novonix, is in providing materials for these high performance, high value products of electric vehicles and energy storage systems.
Dr. Allen Alper: That sounds excellent. Could you tell our readers/investors a little bit more about your background and your Team?
Dr. Chris Burns: We have a great Team across our two facilities. Myself, I did my Master's and PhD with Jeff Dahn, working on high precision coulometry as an evaluation technique, testing electrolyte materials, different active materials, cathodes and anodes. When I finished my degree in 2015, I worked for Tesla for two years, running a lab for them here in Nova Scotia. We did a lot of cell testing work, as well as materials evaluation work, for a number of projects. That work really segued into my being involved in PUREGraphite and the anode side of our business. I co-founded Novonix Battery Testing Services in Halifax in 2013 and we have been building on the equipment and service model. In 2017, a group out of Australia, Graphite Corp at the time, acquired our business here and formed PUREGraphite, and that's really the set of companies that we work with today.
And our team across Halifax and Tennessee, we have about 40 people now, and it's a great blend of experienced engineers and scientists working on our materials scale-up, our R&D programs, our plant design and commissioning through to sales, marketing, and engineers and technicians working on the plant and equipment sides of our business. We have a very diverse team with a wealth of experience, a number of PhDs in battery materials and engineers who have spent time running production companies in the lithium ion battery industry. We have built a great team to execute on, not just our PUREGraphite scale-up, but also our continued R&D and endeavor to build new companies within the materials supply chain.
Dr. Allen Alper: That sounds great. Could you tell me a little bit about your Board?
Dr. Chris Burns: Our Board of Directors has been very important for the Company. We have a very powerful Board, with a lot of experience building companies, mostly based out of Australia, and they work in a great capacity. They're very hands-on. We have very regular meetings to update on the status of our research programs, as well as our production build-out and our customer trials. With people like Andrew Liveris on the Board, we have great opportunities to open doors and begin relationships at very high levels, within companies, that are very important as either customers, partners or suppliers. This is really important because breaking into the battery material supply chain is very challenging.
From my experience working at Tesla and before that, we've seen so many companies try and fail and there're a number of reasons. The technology isn't there. They can't be cost competitive with Asia. Their business acumen isn't there to build a company. They don't have the right connections. I've talked a bit about our technology and our technical capability. Our process allows us to be directly competitive with Asian pricing, so we are not forcing the market to pay a huge premium to move outside of Asia. The Board really brings this business acumen that's going to allow us to scale these to become big, successful companies.
Dr. Allen Alper: Oh, that sounds excellent. Your Company is listed in Australia. Is that correct?
Dr. Chris Burns: Yeah. Our two operating companies; PUREGraphite and Novonix Battery Testing Services are wholly owned subsidiaries of Novonix Ltd, which is an ASX-listed company under NVX Novonix Ltd.
Dr. Allen Alper: Great. Could you tell our readers/investors the primary reasons they should consider investing in Novonix?
Dr. Chris Burns: I think that when we look at Novonix as an investment opportunity, there's the now investment and there's the future opportunity and continued growth of Novonix. The ‘now’ investment is really focused around scaling PUREGraphite. The key aspects to that are: This is the first North American Company to land a supply contract with a major cell manufacturer for battery graphite. So many have tried and failed, and we're the first to get there. So that's really a testament to the capability of the Company, the quality of the material, and the people who have been involved in the development program. That business alone has huge growth potentials, where we want to scale to selling tens of thousands of tons of graphite material over the coming years.
And then when you look beyond that immediate opportunity, you look to our R&D structure and our approach to materials design development, and scale-up. You see things like our recent announcement about dry particle micro-granulation, showing opportunities to build cathode particles that no one else has been able to build before, with a lower cost structure than the current methods. This shows that while we continue to push the envelope to look at new materials opportunities that we hope we can build into companies that are as big or bigger than PUREGraphite. And all of this is on the back of what's, frankly, a relatively small market cap stock on the ASX right now.
One of the other great things about our research and development center in Halifax is that it's fully funded through working with customers. We work with customers on materials evaluation projects, cell design projects, various testing programs and development programs. This does two things. A, it funds our research and development through the profits of that center. We have an incubator for new technologies, funding the university, which has about 10 people working for it. And all of that is done out of a cash flow positive center, which is extremely unique.
The second reason that that's really critical, is working with people within the industry ensures that we have our finger on the pulse of where the industry is moving. One of the reasons so many materials companies have tried and failed in the past is that they lost touch with where the industry actually had evolved to. And the lithium ion battery industry moves quickly so if you set a goal post where you want to get, you need to make sure that if the industry is advancing, you advance that goal post. Our ability to work with customers across a wide variety of sectors and materials helps us make sure that we know exactly where our targets need to be and where the opportunities are to develop new materials that have a role in the supply chain.
Dr. Allen Alper: Well, that sounds excellent. Is there anything else you'd like to add, Chris?
Dr. Chris Burns: No. I think those are the key points. I think that I've touched on our production capability, our PUREGraphite business and the scale-up opportunity, our research and development. The new press release about our process technology that we can use in anode and cathode materials is a testament for the necessity for continued investment in research and development, which is critical to advance our Company.
Dr. Allen Alper: Sounds great. I really enjoyed talking with you. I am very impressed with your Company, very impressed with your technology, your Team. I really think what you're doing is great. Fantastic.
Dr. Chris Burns: The mining connection, of a lot of the investors, is important to understand the Company out of Australia started as a natural graphite opportunity to supply natural graphite to the battery industry. Because of their due diligence, they understood the trend in the market, which, of course, you can find in the market reports and validate, is that a lot of the growth in the need for battery-grade graphite will come from the need for synthetic graphite, not natural graphite. And that's because natural graphite does not have the lifetime to support electric vehicles and energy storage systems that synthetic graphite does.
The Company made the decision, in 2017, to stop activity on the natural graphite project and simply get it permitted to hold. It's ready. It could be developed, but focus on synthetic graphite because it was understood that that is a higher value product that's going to be needed in the highest growth sectors of the lithium ion battery market, electric vehicles and energy storage systems. I think this distinction is really important, especially when you talk to a lot of folks in the mining industry, to understand that natural graphite and synthetic graphite really are going to serve different markets in the future. We believe, and a lot of the reports show that synthetic graphite is going to get most of the share in electric vehicles and energy storage system and therefore most of the growth opportunity.
It's very important to understand the difference between junior graphite companies trying to mine and process material that we believe will not be competitive for electric vehicles and energy storage systems, compared to the synthetic products that we can make.
Dr. Allen Alper: Well, that's very interesting. I'm glad you pointed it out. Now, the synthetic graphite, you'll be manufacturing that yourselves? Or will you be purchasing that?
Dr. Chris Burns: We purchase a precursor carbon material, like petroleum coke, for example, and through our process we take that material, size it, shape it, treat it and thermally purify and graphitize it at about 3,000 degrees C. That's the process through making artificial graphite, is that you start with a carbon-based precursor and have to graphitize it by going through a thermal process at about 3,000 degrees C, compared to natural graphite, which you mine out of the ground and it's highly crystalline already. But that treatment process is what allows us to tune the performance of the synthetic graphites to be much higher than that of the natural graphites for cycle life.
Dr. Allen Alper: What are the properties of a synthetic graphite that'll allow it to have greater life than the natural graphite?
Dr. Chris Burns: That's a good question and a question for which the industry doesn't have a perfect answer. There're different theories around the differences in crystallinity or the ability to treat the surface different through the process or how it started. But at the end of the day, although there might not be a clear answer to why synthetic graphite can outperform natural graphite in cycle life, the data is very consistent across the board that it can.
Dr. Allen Alper: Okay. Well, I appreciate the information and I enjoyed talking with you, Chris. And I'd like to stay close to your Company because I think what you're doing is very important for our society and the Western world. Well done!
Dr. Chris Burns: Yeah. I appreciate that. We're very excited about the future for Novonix.
Dr. Allen Alper: Okay. We’ll publish your press releases as they come out so our readers/investors can follow your progress.
https://www.novonixgroup.com/
Battery Technology Solutions
Contact: Dr Chris Burns
Email: chris.burns@novonix.ca
Address: 177 Bluewater Road, Bedford, NS B4B 1H1, Canada
Telephone: +1 902-449-9121
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