Lithium Australia (ASX:LIT) has signed a new exclusive battery recycling agreement with the BYD Auto Industry Company to provide battery recycling services for all electric and plug-in hybrid electric vehicles’ end-of-life batteries in Australia.
BYD Auto is an automotive subsidiary of BYD Company — a new energy vehicles provider that has delivered 3 million new energy vehicles globally in 2023 and holds 14% of Australia’s EV market share.
Under the three-year agreement, Lithium Australia will receive a service fee for collecting the end-of-life lithium-iron-phosphate (LFP) batteries.
Lithium Australia, which has a market capitalisation of $24.8 million, says the agreement aligns with its strategic plan to increase processing capacity of LFP batteries, as securing future LFP battery collections volumes will scale its processing throughput.
CEO Simon Linge says the signing of this agreement, alongside others, are evidence of executing the company’s recycling growth strategy.
“This milestone achievement is expected to significantly increase our future collection volumes of large-format lithium-ion batteries (LIBs), further accelerating the company’s shift in battery collections mix to be primarily focused on the higher margin large-format LIBs,” Linge says.
Following today’s (4 September) announcement, Lithium Australia’s share price has increased 10% to $0.022 at 1pm AEST.
BYD Auto General Manager Liu Xueliang says the company has continued to transform the global new energy vehicle industry with its technology, performance, design, and commitment to sustainability.
“As a global pioneer in battery manufacturing, BYD’s strategic partnership with Lithium Australia is a testament to BYD’s commitment to reducing carbon emissions for a greener future and strengthen its leadership in technological innovation in the global automobile industry,” Xueliang says.
The agreement is not expected to materially change the current average revenue rates and average costs of sale unit rates. As such, the additional collection volumes are expected to generate additional operating cash profits.
Lithium Australia notes that customary termination rights exist on the occurrence of an insolvency event or any unremedied breach under the agreement.
BYD vehicles are equipped with the Blade Battery, which uses LFP as the cathode material and offers a high-level of safety, durability, longevity, and performance.
The new energy vehicle company has been focused on expediting the green transition of the global transportation sector through developing pure electric and plug-in hybrid vehicles.
Lithium Australia is focused on sustainable lithium production. The company operates Australia’s market leading battery recycler, produces critical battery material lithium ferro phosphate, and has developed a patented lithium extraction technology.
Write to Aaliyah Rogan at Mining.com.au
Images: Lithium Australia
