Battery Revolution Clubhouse Recording - North America's lithium supply chain

0:00Transcript

0:00Welcome to 2023. Welcome to our first episode of this year. This is the Battery Insiders podcast. If you listen to this on Spotify, Apple Podcasts, or any of these other platforms, this has been a podcast running for over a year or two. I don't even know anymore. At least we're at episode 58, so you can see it right a while. We've covered all kinds of topics over the past years now, and I think it's really rewarding. And yeah, for this year, I think, you know, as last year, we're really looking forward to lots of exciting conversations with other battery enthusiasts like ourselves. We're here together as Mariam co-hosting today's session. And yeah, we're really excited to hear about industry leaders and really fascinating people across the entire battery value chain. And yeah, as I said, if you're on this live, you can also listen to the recording again on all of these platforms. And for free to get in touch, we always love to hear from you. Give us a rating, all these things.

0:57I'm sure you all know how these podcasts work as well. Great. So for today, I'm really excited to pass it on to Mariam to introduce today's topic as well as our speaker. Over to you, Mariam. Thank you so much, Simon. So our speaker today is Saad Dara. He is the CEO and co-founder of Mangrove Lithium. Mangrove is a company that is actually de-risking the lithium supply chain. And it does that by introducing capabilities to convert raw lithium into battery materials, but in a co-localized, distributed and highly scalable way. So Saad is here today to speak to us about how they're doing that at Mangrove. And we'd love to introduce him and invite him to speak now. Thank you for having me on, both Mariam and Simon. I appreciate the invite and looking forward to talking more about Mangrove and talking about the work that we're doing. Mariam, it's nice to speak to you again as well. I think we spoke probably a year and a half, two years ago on another topic.

2:03So it's always nice to speak to familiar people as well as fellow Canadians. Thank you for the introduction. My name is Saad. I'm the CEO of Mangrove Lithium. I'll talk a little bit about myself, what Mangrove is doing, and then talk a little bit about the North American battery supply chain. So please feel free to ask questions for both Simon and Mariam. I'll try and stop at appropriate times to give you an opportunity if I need to clarify anything. So as I mentioned, I'm the CEO of Mangrove Lithium. I spun out the company from the University of British Columbia in 2017 with three of my other co-founders. We've been trying to commercialize this technology. We've been working on it for just about 10 years now. It's gone by very quickly. It was my PhD. Initially, when we spun out the company, we were focused on water treatment and desalination. Quickly realized that water treatment and desalination is a very tough topic, and it's a very tough place for a business opportunity.

3:15At the same time, in 2018, there was an uptick in lithium prices just for very quickly and for a very short period of time. And we saw an opportunity there. So we decided to approach one of the lithium producers in Chile and ask them if they were interested in using our technology again for desalination. Water use is a big deal in lithium mining. And they said, yeah, we would be interested in this, but can you actually process lithium through your technology? And we said, yes, we can. And so that started off a little bit on what we're doing. It resulted in us looking at different feedstocks that come from lithium processing operations and converting them into raw materials for batteries. I think for the general population here, I think it would be good to talk a little bit about the lithium value supply chain and where mangrove fits in. The lithium supply chain has effectively six segments. You have extraction where lithium is produced from different assets, whether that's lithium brine, like in Chile, Argentina or Bolivia, or a hard rock mine.

4:41And there's several assets, mostly in Australia, but also in Canada and the United States. There's also direct lithium extraction that's being practiced now that uses different techniques. But that produces lithium in a form that's, you know, you can consider it almost like a crude oil type production. So you produce a lithium in a relatively crude form and then you have to process it and you have to convert it into lithium hydroxide or lithium carbonate. And so that's the second stage, which is the chemical processing. That raw material produced from there goes into the third segment of the market, which is anode and cathode production. And those are the two main components of batteries, the anode and the cathode for any electrochemical system. And then it goes into the fourth segment where it gets produced into actual cells. The ones that you might use in, you know, the cylindrical cells that you might use in your TV remote. So it's a big part of the mangrove.

5:45Or it will get, many of them will get put together into a battery that might end up in a Tesla or another EV. So it ends up in applications, different kinds of applications. That's the fifth segment. And finally, the more nascent sixth segment is battery recycling. So what mangrove does is really we focus on the processing space, chemical processing space where the lithium extraction companies and battery manufacturers begin. So we work with different companies in the extraction space to convert their raw crude product into the raw materials that would actually be good enough to be in a battery. Where mangrove is different is our technology doesn't use chemical phase separation techniques. That's quite a bit of jargon. But we use electricity. So our technology is a completely electrical system. We use electrochemical methods. So using electricity, water and oxygen. Those are the three main inputs, as well as the lithium that comes from different feedstocks. And we convert it into lithium hydroxide or lithium carbonate that can be used in battery manufacturing.

6:58And there are several advantages of doing this. We can obviously talk a lot more about it. But since we spun the company out in 2017, mangrove has, over the last three years, focused completely on the lithium sector. We have our pilot plant that's operating in Vancouver. We work with different companies on that. And now we're in the stage of building our first commercial plant. That's targeted to be deployed over the next 18 to 24 months with different parts of the lithium supply chain, as I just described. And so we're super excited. It's really exciting for me as somebody who started this technology. You know, it was still in Tupperware and literally milk jugs. To have grown over the last 10 years to now building a commercial plant. So it's been a really exciting journey of technology and technology commercialization for me. But also, you know, now the team has kept growing. We're marching our way towards, we're 25 people now. We're marching our way towards 40-ish.

8:16Super exciting to have all these really intelligent people join me on this journey and can't speak enough of the team that's coming together. So looking forward to the next stages. I'll stop there for a little bit. I'm sure there are questions and there are comments. I don't want it to be completely a monologue. Thank you so much, Saad. Yes, there are a million questions for you. Thank you. You mentioned that Mangra was focused on the processing part of the process. And I'm wondering if you can articulate what the exact problem it is that you're solving. Is it the economics or is it the risks of the supply chain? Is it a combination of everything? Yeah. So there are several problems. Do you drive an EV, Miriam or Simon? Unfortunately, I do not drive, period. Okay. Same at this point, yeah. Yeah. Well, you know, I've been trying for about a year and a half to get an EV. I do end up having to drive quite a bit.

9:31I can't afford one, simply. And from our perspective, one of the things that needs to happen for electric vehicles to be widely adopted, and we've already seen this in the start of this. For wide scale adoption, we believe that EVs are going to have to achieve cost parity with internal combustion engine vehicles. That cost parity, in our opinion, is reliant on having a secure supply of raw materials, as well as price stability of raw materials. If you've been following lithium prices over the last two years, they've gone from the record of lithium hydroxide, lithium carbonate price being at about $28,000 per tonne to just over $85,000 a tonne. And it doesn't seem to be coming down. It's kind of plateaued at that $80,000 a tonne. It's been enough. The price increase in the raw materials has been enough that for the first time in lithium-ion batteries the last year, advancements in technologies and advancements and improvements in lithium-ion batteries, which brought the cost down, were undone because of raw material prices.

10:46So prices for lithium-ion batteries went up for the first time. And so that's really the problem. The lithium supply is not growing nearly at the rate that demand is growing. I would say this is one of the things that happened post-COVID. Before COVID, nobody could have predicted. Even the most aggressive predictions could not have expected that lithium demand would be where it is today. And supply just hasn't kept up. We've seen numbers where lithium demand is expected to double every three years for the next 15. And we're talking about the lithium sector having taken like 40 years to achieve the production that they have now. But we need to now double that production every three years for the next 15. So that growth is a huge problem to me. And so that's going to limit how many EVs we can get on the market. From my estimation, from our internal calculations, we think that between now and 2040, it's going to prevent about 350 million electric vehicles from coming onto the market.

12:09And that has implications with respect to climate change. It has implications with meeting climate goals and other things. In addition to the demand supply gap, you also have a very centralized, geographically controlled lithium supply chain. China did an incredible job in dominating that supply. So most of the world's assets, 70% of the world's assets are in Chile, Argentina and Australia. But over 80% of the downstream chemical refining onward stage of lithium-ion battery or lithium-ion battery supply chain is in China. And recently, we've heard a lot of talk about on-shoring lithium supply, producing lithium-ion batteries in North America, producing lithium-ion batteries in Europe. We cannot move the assets, we cannot move the mines themselves, but the refining capacity onwards needs to be onshore. So what Mangrove is doing and what Mangrove is looking to do is be an important player within that, within North America and Europe. We're committed to using our technology, which is in essence, a platform technology that can co-locate either with the mines or with cathode anode or battery manufacturing centers or act as a refinery and develop those capabilities in North America and Europe.

13:45So the core technology has its own inherent advantages in terms of being able to reduce OPEX and CAPEX for mining operations. But also because of its flexible nature, being able to take different feed stocks, being able to work independently as a refinery, we see an opportunity for the technology to start developing refining capacity in North America and Europe, which means that we're less reliant on Asian markets for our product. And that has important geopolitical reasons. That's quite substantial. And so you mentioned the feedstock flexibility. Sure. Can you explain that in a bit more detail? And especially in terms of how that can actually improve the capacity for us to be processing these raw lithium into battery materials? Sure. Feedstock flexibility, what that means is that mangrove as a company or as a technology doesn't really care where the lithium comes from or what kind of asset it comes from. So within lithium extraction, there are three, four different kinds of assets. So you have the lithium brines, lakes that are rich in lithium, predominantly in Chile, Argentina and Bolivia.

15:08Then you have hard rock, which produces spodumene. And that is mostly in Australia, some in the United States, some in Canada. So those are the two biggest reserves of lithium. Then you have clays, which are also lithium rich type sediments. And then finally, more recently, we have direct lithium extraction that's being applied by companies like Lilac that relies on removing lithium from, let's call them unconventional waters. So geothermal or lakes that are not as concentrated or even traditional brines, but they're applying their technology. So we don't have to rely on solar evaporation. So all of these will produce some sort of lithium. It will either be a lithium chloride or it will be a lithium sulfate. Our technology is flexible in that we can work with lithium chloride or we can work with lithium sulfate. So how it's extracted is really not that important for us. The box that we use for it is exactly the same. So that's what I mean by feedstock flexibility.

16:26And in terms of, you know, when we talk about mining companies, that means for us, we're making the same product, whether it goes with a mine in Chile or whether it goes with a battery recycling operation somewhere else, or it goes with a spotty mean operation in Australia. And there are different advantages for each of those sectors. You know, in terms of purity, in terms of cost reduction, in terms of waste production, or closing the loop on consumables as well as conversion to the final product. Great. Thank you so much, Sade. And I think there's also a couple of questions in the chat. Please keep them coming. We'll get back to them in a bit. But yeah, just a few other follow-up questions before that, Sade. I think maybe one quick one on the cost topic, right? You mentioned. Because I very much agree. I think we all agree, right? You know, we want to reduce the cost of EVs. And of course, the lifetime cost is already, you know, can be better today.

17:28So, you know, environmentally, it's already better. So, you know, there's some progress. But as you say, you know, the cost has to be reduced further. And there's different strategy. I'm just wondering, do you know roughly what's the percentage now of the cost of a battery, you know, lithium by itself? Because I know the cost, right, of the anode cathode, et cetera. But do you know roughly the cost of lithium for a lithium-ion battery? The cost of, like, on a metric ton basis. No, more like in the battery, right? Like what's the percentage now? Maybe the percentage of these here. Like how much of this battery costs today roughly? I mean, I know it fluctuates a lot. But just so ballpark maybe for our listeners. Do you have a number there in mind? I can't remember it right now. I can find it and get it to you another time if that's okay. You know, it is. I will say that it's. I'll have to look at it.

18:17But again, and what it was based on. Surprisingly, it is not the biggest cost. There's a lot of things that come in. But it is now becoming enough that it's undoing. Undoing progress. But also, I think the more important point is that if you actually don't have lithium or you can't secure the lithium, then you can't make a battery because you don't have the raw material for it. And getting lithium and producing supply or enabling supply to come on faster is actually a more important thing. And so production cost reduction is important. Not in the sense of so much how much impact it may have on battery cost, but really more on what if your production cost is less than that investment opportunity is significantly more attractive. And if you can improve the mines, you know, economics in terms of its IRR, then you allow it to be funded faster. And that allows supply to come on faster. So that's one of the big pieces on what Mangrove is working on.

19:36I absolutely can see that. I think as you just touched on the Inflation Reduction Act, you know, I mean, you know, kind of, yeah, you know, putting into place a neat localized bi-chain. I see a Barrett from our team on the call. And, you know, we just did a piece on that as well. So I think, yeah, that's I think you're absolutely right now. Newsletter, et cetera. So I think, you know, the supply is a big topic. Maybe just two kind of other related questions. One, because it just came up, right, when you mentioned lithium. We also see a lot of hype right now about sodium-ion batteries. I was just wondering, is this something you ever looked at? Kind of can you use similar techniques to also get sodium? But I'm not sure. I mean, yeah, I haven't really looked into this at all. I'm just curious. I have not looked into sodium-ion batteries as much. I think, you know, sodium-ion batteries are rather in how they're put together.

20:30I think sodium-ion batteries are going to have a really good place, especially in grid storage. But I haven't looked at whether our technology can be applied there. We can certainly, we will, that will be a new thing for our business development team to progress on. That makes sense. I'm sure that the lithium demand by itself is big enough for now. And then maybe one last question from my side. I'm not sure, ma'am, you want to give some more or you want to go to the audience? Because I know there's quite a few questions already. But I'm just curious on the topic of feedstock, right, where you get your materials from. I think it's super interesting what you said, right, this topic of you don't really care, you know, how the lithium is mined at this point. Is it like out of brines, out of water? Is it like, you know, out of Australia, you know, like out of, you know, rock or whatever it might be?

21:22But I'm wondering also, like, can you also use your process for recycled or like to get lithium out of, you know, recycled slurry or like, you know, feedstock? Because, of course, that's a big topic as well, right, to do this cost effective. And especially when I'm saying it also looking at Europe, right, we have this European battery relation, which will come into place this year. And that also has requirements on lithium recycling. So you actually have to find a way to recycle lithium. And, of course, it's cost effective to better. So I'm just curious, is this something you also have looked at? Yes, we have, actually. And there's a really strong fit for our technology within battery recycling, too. I won't share the details on the projects. But, you know, I think when you recycle batteries, so let me step back. We talked a little bit about you either produce lithium chloride or you produce lithium sulfate when you do upstream extraction. So mining from brines, hard rock, clays, or direct lithium extraction, you produce lithium chloride or lithium sulfate.

22:28So what happens in a battery recycling operation is you get all these batteries from different places. Imagine a lithium battery recycling operation as a mining operation as well, except your source of the mine is distributed everywhere around Europe or everywhere around North America. I can't remember, but I think I saw somewhere. I'll have to find this. But it was interesting that there was potentially more lithium in people's homes than on the continental United States because it was just sitting in batteries. So you have all of these batteries. You get them into a certain central place. You crush them. You process them. Well, you have to discharge them and stuff like that, too. You crush them. You process them and then you produce a black mass. And that black mass then gets processed further into the different metals. So you get copper out of it, nickel, cobalt, lithium. Another one maybe, but I might be forgetting. But you get those four major components out of it.

23:34And then those go into production again. So the battery recycling operation with respect to lithium will produce lithium sulfate. So as I mentioned, we don't care so much about where the lithium sulfate comes from or lithium chloride comes from. Same thing applies here. The quite strong advantage for this in terms of battery recycling is that we actually produce a byproduct that's quite important. The lithium sulfate operation from battery recycling is very, very similar to a spot immune operation, so hard rock. So hard rock also has the same problem that for every ton of lithium hydroxide that you produce, you produce two tons of a waste sodium sulfate. So battery recycling operations will likely have this waste that needs to be disposed of as well. Predominantly in the past, you know, we used to use sodium sulfate and powdered detergents, but everybody uses liquid detergents now. So that market isn't there. And so this is becoming a burden for that. When we use our process, we take that lithium sulfate, we directly convert that into lithium hydroxide.

24:49That goes off to battery manufacturing. One of the byproducts that we get is sulfuric acid. And that sulfuric acid gets completely used in the battery recycling operation. And so one of their biggest consumables on sulfuric acid consumption is completely met with our process. We also produce battery grade lithium hydroxide out of it. And we have no sodium sulfate disposal. So we completely eliminate that burden. And so that's that's a future market that we're we're looking at. And that's a future market that, you know, we're working towards. We do have projects in that space. But I say that that future market is actually now there's quite a bit happening. Most of most of the batteries that are being recycled right now are production scraps of batteries, not good enough to go into the market. But that market is going to grow and it will keep growing over it. Probably in the next 80 years, it will become quite, quite significant. Thank you, Saad. Saad. You know, a significant point that you mentioned is the lack of supply to be able to meet the demand of lithium that we need today.

26:04But, you know, an electrochemical system in its current state can be more expensive than a lot of the chemical processes that have been going on for three years now. So can you can you describe at scale if the electrochemical process you're building can actually compete with the economics of their alternatives, the chemical ways in which we process the raw lithium clay? Very good question. And yes, the short answer is absolutely. So when we apply lithium hydroxide production, we can talk about it in terms of case studies. So lithium brines, typically they produce, they'll go through the solar evaporation process. Lithium brines will produce a lithium carbonate. And if you need to convert, if you need lithium hydroxide, which is often what's required for high performing batteries, then you need a second plant and you need second OPEX for that. Typically, the lithium hydroxide production from brines is in the four and a half to five and a half thousand dollars per ton range. We believe that we'll be able to bring that technology, bring that cost below 3000.

27:21And we have good, good reasons for that. In addition to in addition to that OPEX reduction, we also eliminate that second plant that's required for converting the lithium carbonate to lithium hydroxide. Predominantly right now, brines don't actually do the second part. They actually send it to the lithium carbonate to China where it gets refined and then it goes for use in lithium hydroxide. But we can do that at the mine level in Chile or Argentina with our technology, reduce that cost, eliminate that second plant and remove the reliance on agent converters for it. So that's what we would say. So roughly we expect like a 40% OPEX reduction as well as quite a bit of a CAPEX reduction with brines with our technology. With respect to hard rock or lithium sulfate operations, the CAPEX is about the same, I would say. But there is an OPEX reduction as well. The percentage I'll have to remember, but it's not 40%, it's in the 20 to 30% OPEX reduction.

28:38But also it eliminates the waste disposal. And so that waste disposal and the consumables associated with it become quite a big challenge. So from our, from what we're doing, the electrochemical process, even at quite competitive electrical prices, so by, I mean, you know, the 10 cents a kilowatt hour range, we know we will be more economic. There is risk associated with electrochemical technologies. They need to be proven. That's what we're doing right now. So in terms of, you know, the future, if, if we believe the, in the future of cheap electrons, so electricity coming down because of renewables to one or two cents a kilowatt hour, that's just even, even more reason to apply, apply electrochemical systems to those. But yes, they, you know, they're at a point where, or the lithium sector at least, they need to still be proven. Thank you so much, Saad. Now we have a few questions in the chat and I'll leave it to Simon to introduce our audience members and their questions.

29:49Fantastic. Thank you so much. I'm okay. And Saad for great insights. Okay. Mark, would you like to go first? Thanks for joining. Mark, can you hear us? You're muted at this point. Otherwise, maybe we go to the next one. I think the next question, Ngoto, would you like to go? Maybe there's a technical issue. I will give you both in a moment. We have the questions in, in the chat. Should we go through those? Yeah, why not? Why don't you, let's, let me ask the one from Mark first and then maybe for the second one, you can go. So the first question from Mark was, what is the business model for your technology, licensing, fee-for-service model, etc.? Thank you, Mark. That is a good question. I like to talk about that too. Our model... Sorry, Saad, I think you're breaking up a bit. Right now, the first systems that we're working on, we, our model is... I think Saad, we might have lost you for a second.

30:56Is it better now? Is it better? Is it better? Can you hear me now? Oh yeah, it's much better on my hand. Okay, excellent. Yeah, might have just been the internet connection. That's a very good question on the business model. So currently our business model for our first plants, the ones that we are putting out over the next 18 to 24 months, is going to be fee-for-services. So we will own the technology, we'll put it on the site, we'll operate it and operate it as a services model. And that's been pursued because we want to de-risk the technology and we want to prove it to the market. But once it has been proven, the intention is that after that, the plants would be licensed to different producers or different companies for use with a fee as well. But we would provide the technology and continue to provide support. And so those are the two business models that we're pursuing at this time. Hey, I'd like to answer the second question I asked.

32:01Thank you for the first question, Saad. So my second question is, your goal is to start with a lithium concentrate, either chloride or sulfate, and convert that into battery-grade lithium hydroxide. Is that a correct statement or is that a hope? No, that's the correct statement. Okay. Okay. So I'm curious how your technology that is better than traditional cell splitting in terms of electrochemistry, because I typically use electrochemistry to do the same sort of thing. What's your advantage of your technology? Versus traditional cell splitting? Yeah. Yeah, absolutely. So it depends on what feedstock we're applying it to. With respect to lithium chloride, we don't have any production of chlorine gas. That's an important part of it. We don't have any production of hydrogen gas. We don't have handling requirements there. In terms of the actual purity of the lithium hydroxide, the way we run the electrochemical cell is slightly different. And that has purity advantages in terms of how much chlorine or perchlorates end up in the lithium hydroxide.

33:20With respect to both lithium sulfate, the purity of both the lithium hydroxide and sulfuric acid are quite important there. In addition to that, we also recover a lot more lithium. Traditional cell splitting, roughly, well, you know, the system has, at least in a single pass, has quite a bit of lithium staying within the system. We recover 95, 98 percent off it. So there are several technical advantages related to traditional methods, as well as energy consumption. We will, the way we are running the technology, we will have the lowest energy consumption. It's from fundamental thermodynamics. Our main differentiator there is oxygen cathode. And that oxygen cathode allows us to reduce the energy consumption significantly. Thank you. I had a quick third question. So you're able to get recovery of, say, a minimum of 95 percent, which is, I think, higher than traditional refineries. Typically, you lose some recovery when you go to traditional lithium refinery for that. I think it's more than that, 5 percent you're speaking of.

34:33So is there a limit? Is there an impurity limit that limits the operations unit? Meaning, let's say they send you a product that's 10 percent iron in that solution. And is that going to affect the ability of it to run effectively? Of course. You know, the impurities that are in the salt will, of course, affect it. Typically, we work with customers that have very good compositions. And we prioritize based on that. We do take some pretreatment within our scope, depending on what it is. There are obviously resources that we look at and we say, like, oh, this is just going to be a very difficult play. But predominantly, we look at those and say, like, OK, this will need to go through some sort of pretreatment step. And we have very strong capabilities on that. We understand that quite well. And then we process it further with the electrochemical system. So in terms of the product offering, you know, we're not just limiting it to the electrochemical cells.

35:45We do provide other kind of process flow sheet type additional capabilities as well. Thank you for your time. I appreciate your answers. Thank you for your question. Great. Thank you. And Gotto, would you like to try it again? Or should we ask your questions for you? Mayam, would you like to ask them for Gotto? Let's do it. So I'm going to ask a couple of questions. First being, how much, well, first off, impressive progress. How much did you, did it cost to set up a commercial refinery? Was it a lengthy process with renewed interest in lithium batteries? Thank you for the compliment. We haven't set up a refinery yet. We are working on it. So I can't answer that question. I will tell you once it's done. Perfect. Perfect. And how environmentally friendly is the production process in the market? I don't know if I can, I'm not sure if I understand the question completely. Environmental for the traditional process, current processes or our process.

36:53And do we have a sense on that? Because that would change the answer quite a bit. If I can say what I'm curious about is if there's a quantification for the CO2 abatement you're able to introduce by replacing a really carbon intensive chemical process with your electrochemical process? Yeah. Yeah. Yeah. I mean, that will depend a lot on what your electricity source is. I'd argue that if you're using diesel for your electricity source, it's going to be quite difficult. From our perspective, from what we've looked at, we do think that there will still be, even with natural gas based electricity, there will still be a carbon emissions reduction. I think a lot of that will be, a large portion of that is associated with the trucking and shipping of chemicals that are often required. Those, those have the carbon emissions associated with it, as opposed to if you have electrical based systems where you don't have that trucking and shipping and that will reduce it.

38:02I will say that I don't know the exact number, but of course, if it's, you know, with renewables, you'll certainly be quite, quite far ahead. And that's, that's the opportunity. I'll have to take a look at what kind of electrical source you have to, you know, you can't use before it becomes higher emissions than traditional processes. Thank you. You're welcome. Oh, and Gopil, your audio is on. Was that the answer to your question? Yeah, precisely. Yeah. You got it right about the carbon. Wonderful. Do you have any follow-up questions? No, I think we're good. Thanks. Awesome. Barrett, do you have any questions for San? Yeah, Maryam. Thank you. Thanks, Seth, for the detailed explanation about your recycling process and things like that. So I do have a question. So in, in our, I just attended a meeting where we interviewed many people on the recycling, like in the Battery Associates battery day. When we ask for what is the recycling method that will be highly adopted in future, many say it's like hydrometallurgical.

39:21Maybe in future, they also move towards direct recycling. So what's your comment on it? Is it like in the near future, we will adopt hydrometallurgical and move to advanced recycling techniques like what you are developing? And maybe finally reaching down a direct recycling process when we have a standardized lithium-ion battery or something else like that? This is a good question. And I think it's a, it's a good question for a lithium battery recycling expert. I'm not, I'm not one. From what we have seen, most, or at least it looks like hydrometallurgical will be, will be dominant or is going to be coming up. But I, I'm not an expert in battery recycling. So I can't comment. I'm sorry. That's okay. And do you have any specific cost numbers on your mind? For example, what is the cost of maybe a pertent cost of recycled lithium to really, I mean, the fresh lithium, the primary and the secondary raw material? So, and also, is there any possibility to avail some tax benefits if you think like that?

40:29Yeah, again, I can't comment on that again because it's, it's not within my wheelhouse. But in terms of tax abatements, and I know that there is quite a bit of opportunity with the Inflation Reduction Act that Biden released. So there are quite a few opportunities there for battery recycling operations as well as for even production capabilities. And I know that Canada is looking at doing something similar. So I think from a policy perspective, there, there will be policies that will improve those economics that will encourage further transition towards electricity or electrification. I don't have exactly the policy numbers there. But I can't comment on the cost again because we just don't have it. Okay. That's great. Thank you. Thank you so much. My pleasure. Thank you, Parvathan. Thank you, Sal. Maybe also just on a question, I get it's tricky, but I'm just wondering, is there like anything you know about size? Because we have looked at this also in the past, right? Kind of, we spoke about this, right?

41:40Like, you know, what kind of installation do we need to make it economically viable, right? So is there like a minimum amount, let's say, of, you know, how much you have to process, let's say a day of, you know, how many times or whatever, or keto? Just curious kind of to get a bit of an understanding how small could you break this down and could it become more like a decentralized topic? Or do you need like big, you know, like big refiner installations to make it make, you know, worthwhile economically? From a mangrove perspective? Yes, from your experience. Yeah, your perspective, yeah. Yeah, we think the smallest, let's put it this way. The economics are dependent on several different factors. So, you know, electricity is one component of that. Labor is a second. Labor costs are themselves quite important. And then you have other things that go into it in terms of replacement of parts, pretreatment, et cetera. We think that mangrove will have essentially two product offerings.

42:41And those are going to be a 3,000 tons per year plant and a 10,000 tons per year plant. So, in terms of why we've chosen those numbers, it's based on what we've seen in the market with respect to the size of the actual project. So, from a battery recycling or some of the smaller lithium mining operations, we think the 3,000 type plants being modular plants and increasing capacity that way up to, let's say, 9,000 or 7,000 or 8,000 is the approach. But if you're looking at big mines, for example, in South America, we think that, you know, they have capacity of 20,000 or 30,000. Then the 10,000 tons per year plants would be what would be replicated and brought on in phases. So, based on, you know, just what we think the product offerings for mangrove will be, I'd say that economically, you probably need to be in the 2,000 to 3,000 tons per year range of lithium hydroxide. So, the LCE equivalent, I don't have exactly, but it will be similar to that for it to make, you know, good economic sense.

44:02Or at least you can get to, you get to take advantages of economies of scale there. Smaller than that, you're suffering on labor, you're suffering on economies of scale, things like that. That's great. Maybe just to get a ballpark, I know it's tricky, but just, I mean, to get fear, like, how expensive are these? Because I'm wondering, why don't we have more at this point, right? Because it's always this topic of, there's not many refiners out there, especially in North America, right? So, is it like, if a ballpark, how much these would cost, or, I mean, yours or anybody else's? Given the customer discussions that we're having, I'd rather not share that number. So, I'll say no comment to that. But, in terms of why we don't have more refining, I think people, you know, people haven't paid attention to the lithium market. North America and Europe are behind. Most of that, you know, has gone to China because they've looked to invest in it a lot earlier than we have.

45:04And that's credit to them. So, we do need to bring this here. And whether that's electrochemical or traditional, we need to start thinking about it. I should say that the bottleneck isn't just the refining. The bottleneck is not enough mines coming online in North America, in Europe, or how long it takes even just the mine to come together. You know, it can take five to seven years at least for it to start production. So, unless we predicted in 2017 or 2018 that lithium demand was going to be what it is today, we're going to be behind. And so, it's just, you know, it takes a long time for these things to come online. And in addition to that, if you're in North America and Europe, typically permitting requirements are even more stringent or take even longer. So, those things need to be accelerated for this to happen. Thank you so much, Saad. Now, I have a question relating to the target market. You know, as if it wasn't difficult enough to bring a new technology to market, scale it up, and so on, oftentimes it's the go-to-market that can make the biggest difference in mass adoption.

46:21And so, can you speak to us a little bit about where is it that you're seeing the biggest pull, the greatest urgency, the highest willingness to pay for co-locating your technology? Yeah. Yeah. This is, for any startup, speed to market and proving the technology as quickly as possible is the most important thing. And that's important not just from, you know, our own internal cash burn rates or how much it takes to develop the technology. And the quicker you do it, the less you'll end up maybe spending. But also, it prevents other competitors from being able to enter the market. So, speed is of the essence. That does not go well with big mining companies. They are slow-moving ships and sales cycles can be quite long. And where we've seen the fastest traction is, I would say, actually in the battery recycling space where they have been moving much quicker. With respect to our go-to-market strategy, our strategy has been fastest to deploy and the fastest to show a reference customer that we can then work with and point to and say, look, the technology is working here.

47:55And it will apply there as well. So, that's been our strategy. So, we're working with companies across the supply chain. So, upstream chemical processing, anode capital production, as well as recycling to get to that point. Just going back to the previous question that Simon asked on why hasn't this been done or why have electrochemical technologies been applied or deployed more widely. And one of the things is also the risk remaining. Or rather, I should say, the perceived risk remaining. As an electrochemist, there are certainly things that we still have to prove out. But electrochemical methods have been around for a while and they have been successful. But there is a perceived risk remaining within the market in proving it out. And so, that needs to happen. And I think once you have the first one or two systems that are demonstrated and proven to have reliability, then this will become much more common. Great. Thank you for sharing that. Just wondering if anybody has any other questions.

49:12Please don't miss the chance to ask it. I think there's a lot of interesting topics here to be addressed. Great. Just looking. If anybody else has a question, Mark, you can go to Barath Crystal. So, if you're coming or anybody else also here listening in right now, Philip and others, you're welcome to ask any questions as well. Otherwise, I can also bring another one. I'm just kind of curious where you see the market to develop. So, do you think, for example, North America will become a leader in lithium and on the lithium topic? Just curious on this topic. I certainly hope so. I think North America will build a lot more capacity and will become much more active within the space. Maybe not unfortunately, but I think that China will continue to be dominant. They'll lose. I think they have like 80% market share, but I don't think they're going to lose that to below 50% anytime soon. North America is just going to take too long.

50:19So, for the foreseeable future, I think that the Asian markets will continue to dominate. I think North America will become an important player. I think Australia is continuing. I think, you know, continuing to be one of the strongest countries. I think Argentina will be next behind them. And that will depend a little bit on, you know, what the political situation is in both Argentina and in Chile, depending on what's happening in the Chilean jurisdictions. I'm not fully aware of that with the new governments. I think Canada will also play an important role. And that will be because of our assets. I think we have not just the mining capabilities, but also in terms of what we can do within the battery EV space. So, I think those countries will be important. And I think, you know, North America will become a stronger player, but Asian markets will likely continue to dominate. Great. Thank you. And I think we will also go to Crystal. We just lost her, I think, in a moment.

51:42Maybe just a few quick follow-up questions on this one. So, one, would it make sense to kind of go closer to the mines itself? Because, I mean, just to understand, like, well, what would you get? Like, you know, just from a weight perspective, because I know, for example, a lot of the, you know, mine materials shipped, let's say, from Australia and Chile, et cetera, to China. And as you said, I was quite surprised that, you know, I mean, lithium is quite, you know, like it's distributed in a couple of countries and a couple of countries who can mine. But refining is done very, you know, it's very concentrated right now as China. So, I'm just curious, could you put your refining installations closer to the mines? One question. And then also just on the energy topic, I mean, because I know in China, right, like, with gas, a lot of roasting going on, et cetera. I'm just curious, like, how much C2 can maybe save through your process if you go over renewables, et cetera?

52:33I'm just curious. Yeah. So, we can locate with mines. And actually, that's what we're working on as well. So, we do plan on being located with mines. Having said that, the capacity that's required on mines is quite big. And so, when you're looking to prove a new process, you know, what scale you need to have it proven, quickest, that's CapEx efficient. That is quite important. And also, we're a Canadian company, small company. So, we're focused right now on U.S. and Canada on part of that first plant. But the plan is to actually be built into mines at where the assets are. So, that is something that we, but it's a longer term or midterm plan. In terms of the CO2 abatement, again, I'll have to go back and look at the exact numbers. But, you know, we don't, we won't be affecting emissions from, for example, roasting. We don't get involved in that stage. But with respect to chemical processing, we will have a reduction there.

53:57The proportion of that, as I mentioned earlier, will depend on your source of electricity. So, that I'm not sure of. But we do expect the carbon emissions reduction. Interesting. Because I just think this would be a strong advantage. And then I will now pass over also to Mark Inglaterra and Crystal. But just one quick follow-up on this one. Just from a, because we had another session here with someone working on cathodes. Which was also interesting. In Virginia, a few episodes back. And also interesting, her perspective. And just kind of the, so can you say like roughly what stage are you at? Like, you know, what kind of volume can you process today? Yeah. Yeah. So, right now we're at a pilot plant. So, we're probably a TRO of seven. We're not a commercial technology yet. We are building our first commercial plant. That will have a capacity of 3,000 tons per year. And that's projected to come online in the next 18 to 24 months.

55:00So, that's where we are. And then after that, the intention is to be able to replicate and grow. And put out more of these plants. So, that's where mangrove is. What was the second part of your question? Well, that's it. You answered it. That's all you're perfect. That makes sense. That's great. That was exciting times for sure. So, I think there's now a few questions from Crystal. Do you want to quickly try to ask yours before we go to Mark and Goto? Yeah. Can you hear me now? Yes, we can. Yes, I can. Okay. Perfect. Thanks for the time. So, I know you were just mentioning about the cathode materials. But is there any interest or talk about lithium fluoride? Because I know that's going to be big fluoride, electrolyte salts, additives, all that. Yeah. Lithium fluoride is an interesting one. What do you do with the hydrofluoric acid? Which is a very aggressive compound. It's very, very difficult to handle. Yeah. We've looked at it.

56:01We've, for the time being, looked not to get too involved in it. Just because of the material, the selection, safety, and how to handle HF. It may be an odd thing for us to do, but there would certainly have to be some very unique engineering things that we'd have to do to be able to deal with that. So, for that reason, we've kind of stayed away. But we have, we'll see if it becomes a major interest later on. Okay. Thank you. You're welcome. Hi. I have one more question for you, Saad. So, I know that Tesla's building a refinery in Texas, and their goal is to produce battery grade product from concentrates of various types. You know, why would we go to you and say, I work for a recycling company. Why would we go to you versus a Tesla for making a battery grade product? Because, you know, at such a small scale, I would think there's some risk to going to a small client to convert.

57:15Rather than just going to a large client, they can convert it. And there's no risk in terms of getting battery grade. Because if we don't get battery grade, then that's a big hit in our processing. You mentioned hour. What do you mean by hour? Who do you work for? I work for aqua metals. Okay. Excellent. So, I was curious about that. You had some really good questions. So, I'm not familiar with the method. I know that Tesla's building a refinery in Texas. I'm not familiar with the method that they're using. But not all refining methods would apply to all different assets. So, it will depend a little bit on the asset. And what's coming out. So, I'm not sure if it's a play that they're applying it on. Where you may have, you know, maybe different opportunities on the techniques that you can use. And it will also depend a little bit on what kind of, you know, process you're using in terms of battery recycling.

58:25So, if it's a hydrometallurgical process, there's a requirement for consumables. So, if it's a process that can also generate assets for you. But if it's, you know, something else. And that refining operation is using, I think the other alternative would be like maybe pressure leaching. So, if it's a process that can be used to be using the same, then that has a drawback. You need that consumables. So, it will depend. It depends really on what the needs of the project and the needs of the assets are. And that would be the reason of choosing one over the other. As opposed to, you know, that I don't think that all techniques apply to all assets. Okay. Thank you for your answer. Yeah, no problem. We can connect later, you know, if you want to talk more. Sure. Let's connect. Nikozo, do you want to go next? Hello. Ah, my mic's working. So, we've seen some, you know, increased demand for, you know, for talent in terms of battery scientists.

59:42You know, are you seeing that in your business? And what's the effect? Yeah. This is actually quite an important point. We talked a lot about, like, supply not keeping up with demand. And, well, if supply is not keeping up with demand, and, you know, that's a limit at assets. There is also a huge limit on qualified people within this sector that have been there and done that. So, the talent that's required for developing a project for engineers that understand how lithium is processed. That also needs to double every three years now because we're increasing the amount of production. So, that has been a challenge as well. And I think this has been a challenge not just, you know, for the lithium sector. There's been obviously a challenge with qualified workforce and the availability of people post-COVID. And now we're talking about, you know, specifically looking at engineering disciplines. We're looking for scientists, technicians, operators that are going to be applying themselves in this new area.

1:01:02But there's such a limited pool because it was never at the scale that it's going to be at. And so, that has been a challenge. And so, we've been taking a strategy of trying to figure out, you know, what other sectors can transfer over in terms of skill sets to the lithium sector. So, oil and gas is a good one. You know, if you're an oil and gas engineer and you're looking to say, well, maybe the job pool there is reducing over time, then lithium is a – and you have, you know, still 20 years remaining in your career. Lithium is a very good market to be in. I think that skill is quite transferable. But we've had a challenge with this. Yeah. Thanks for that. I mean, you're a CEO, so I'm guessing a big part of your work involves hiring people. How do you convince someone to back your vision when, you know, someone, you know, China is calling, Europe is calling, and all these big EV companies are calling?

1:02:15Yeah. Yeah. I think, you know, for one, I'm a very transparent person, a very honest person. So, I completely share what our plan is and what we're looking to do. And from my perspective, any folks that we interact with or we're looking to bring in, I'm very honest about, given the stage that we are at the company, what kind of role they'll be playing. And that's often quite important to folks in terms of, you know, understanding that they'll be playing a meaningful role in what Mangrove is building, as well as where we – you know, where their responsibilities link to what the company is trying to do. And so, I think, you know, from my perspective, having people bought in and how they're contributing is quite important. And that's typically how I have a discussion on why they should join Mangrove as opposed to somewhere else. We, you know, buy – I think that's a big part of any position, whether you're CEO or if you're, you know, doing something else.

1:03:38A big part of it is how am I contributing and am I going to be feeling satisfied with the contribution that I've made? Got it. Got it. Yeah, I get you. That makes a lot of sense. Okay. Thanks. Yeah. My pleasure. And see, that's actually a great focus area. So, in Canada, at least, which is where Mangrove is located and where Paulsonix is as well, there is a big focus in policy and, you know, the hydrogen strategy and all of the different battery mandates to increase the domestic labor for these industries. Now, Saad, coming out of academia and your technology coming out of academia, can you tell us a bit more about where, you know, the relationship between academia and innovation when it comes to commercializing technologies that are really needed for us to transition to meet our net zero goals? There's many layers to this question. So, first, I'll say this, that innovation doesn't need to come out of academia for it to, you know, to commercialize.

1:04:55There are many, many, many, probably better places that innovation can come out of and be commercialized. So, we spun out of UBC. This is something that I was doing. But there would have been advantages of not being in academia. But in general, I think if we're looking for technologies to eventually become companies and companies that become successful, then the best way to do that is to make sure that you have a lot of technologies coming out. So, you know, you go through the technology commercialization path and technology readiness level of one all the way to nine to commercialization. That's a long process. You're going to go through two values of that. You're going to have ideas that are good ideas, but never practical. And then you have practical ideas that can actually work, but don't make it for personal reasons or for different reasons, business reasons, IP, whatever. And then, you know, you get maybe a few handful of companies that are really, really successful.

1:06:17And so the best way to do that is to increase the probability of those companies succeeding. And so you can take two approaches. One, make sure that you have a lot of technologies that are coming out. So remove barriers for innovation and entrepreneurship to spin out companies. And then two, a lot of mentoring of those companies to be able to get to that point where they're actually going to be successful. And so I think both you and myself, we came through creative destruction labs. I'm not sure if Pulsanix did, but I think you did. So, you know, those become important things. And so we have to focus on making it easier for entrepreneurs to spin out companies and to take it forward. And then we have to provide them good advice to make sure that they're going to succeed. And to those who may not know, Saad's company is actually supported by Bill Gates' investment firm, Breakthrough Energy. And there's obviously, you know, a relationship between North America and Europe through collaborations with Breakthrough and so on and so forth.

1:07:33Saad, can you illuminate or highlight some of the policies that are playing a role in trying to increase the competitiveness of the battery supply chain in North America and Europe specifically? Because we see a big focus on the downstream. We see a big focus on the battery packs, the hydrogen systems. Can you tell us a bit more about, you know, the focus on the upstream side of things? Yeah, a couple of things I'll add just on that. So we were funded by Breakthrough Energy Ventures, who led our Series A investment. But they weren't the only ones. They're not the only ones. BDC Capital, which is Canada's bank for entrepreneurs, is also an investor in Mangrove, as well as BMWi Ventures. So those three companies are invested in Mangrove Series A. And those are partners that we were really excited to bring on. And especially BDC for Canadian companies is a great partner to have. In addition to that, I just want to say that, you know, while we are through Breakthrough Energy Ventures, there's a big difference between the Bill Gates Foundation and Breakthrough Energy Ventures.

1:08:49So those are kind of two separate things. In terms of policy, I know that there has been a lot more discussion on what can be considered a local supply chain. And so within the United States, I think local isn't just the United States. It's Canada, UK, and the EU. So I think that's a big deal. And that's a big deal for Canadian companies. That's a big deal of working with allies and being able to trace where our critical minerals are coming from. I think that's really good. The second thing that we've seen, or recently when it was announced by Minister Wilkinson, on the critical mineral strategy, was being able to work with governments that are involving indigenous communities on critical minerals. I think that's quite important in developing the supply chains as well. In the IRA, you know, there are tax incentives that are related to setting up battery manufacturing capabilities in the United States. Tax incentives both for, well, either for CAPEX or for OPEX.

1:10:15And those can be quite important. With respect to granting agencies, I know the DOE is working on projects as well as, you know, in Canada, we have SDTC. That provides funding for these kind of things. And I know that those are being prioritized. And also, I believe Canada is looking to mirror the IRA with its own version. And we'll see how that will be made available over the next few months. Fantastic. Thank you so much for sharing. So I've also given this policy perspective as well. With this, I think we're getting pretty much to the end. If there's no other urgent question from anybody in this room at this time. Otherwise, feel free to raise your hand quickly or put it into the chat. Otherwise, I really want to, you know, use this chance to thank yous out for providing this great insight on the topic of lithium, especially on the topic of lithium refining. And as we learned also today, all of these connected topics there as well.

1:11:16Yeah, I'm sure people can stay in touch. I think, you know, Mark and others maybe are interested. What's the best way to get in touch with you, Sal? Yeah. First of all, thank you for having me. Really enjoyed the conversation. Some really good questions. You can connect with me on LinkedIn. I just go by SatDhara. Or you can email me at satdhara at mangrovelithium.com. You can also email through the mangrove portal on our website, which is, I think, is just info at mangrovelithium.com. So those are places that I can be reached. Otherwise, mangrove also has a Twitter account as well as a LinkedIn page. And we periodically put up, well, we talk about the market. We talk a little bit about, you know, what we're doing. And so it's a good way to keep updated on what's happening in the market and what projects are coming. We try to make that more educational as opposed to mangrove focused. But, yeah, feel free to just reach out.

1:12:22And I'm happy to always have a conversation. Fantastic. Thanks so much, Maya. Any last words from your end? Just thank you so much, Sal, for the topic that you brought forth here. It was really interesting to understand the relationships and the dynamics in the upstream supply chain, which is something that, you know, I know there's a lot to talk about, but it's often a huge topic to tackle. So really appreciate you coming on and actually speaking to us about it. My pleasure. Fantastic. Yeah. And maybe just a last word. If you're interested in this, feel free to either check out some of our past recordings on, you know, as I mentioned, on the Battery Insiders on Spotify, Apple Podcasts, or anywhere where you listen to your podcasts. You can find a range of different topics, including recycling and production and cathodes and, you know, solid-state and lithium metal and all these interesting other topics in the world of batteries. There's a lot of recordings to go through.

1:13:19Also, of course, you also can join us for the next session, which is going to take place again the first Saturday of the next month, which is going to be February. And the time probably will be decided a bit shorter to the day, depending on the time zone of the speaker as well. But, yeah, please join us for that as well. And also maybe just the last word because we spoke about talent. And anybody who knows me is Simon from Battery Associates. I'm very passionate about this topic. Feel free to also check out the BatteryMBA because, yeah, we've got lots of brilliant people in there. And I'm sure, you know, we need all of the great people to do this important transition. Thank you so much, everyone. Thank you. Bye. Thank you so much. Have a great weekend, everyone. You too. Take care. Bye-bye. Bye-bye. Bye-bye.