Battery firm has edge in power play

By ROB O'NEILL

Pacific Lithium is embarking on a research and development quest to slash the cost of producing lithium batteries and produce a viable alternative cell for markets dominated by traditional lead-acid battery technology.

But to succeed it needs to beat some of the world's biggest industrial combines to market.

The company this week revealed details of its plans following success in the Foundation for Research Science and Technology's first New Economy Research Fund round. The company will spend its $675,000 award on further development of low-cost ion and polymer battery materials.

Most batteries employ a liquid electrolyte, but water-based solvents break down at more than one-and-a-half volts.

A lithium-ion battery uses an organic solvent plus salt to increase the voltage of the cell up to four volts. However, organic solvents such as gasoline are volatile and need to be encased and secure.

A polymer system, the other focus of the research, does not require this, allowing the battery to be moulded into, for instance, the casing of a computer or the bodywork of a car.

The quest for the holy grail of battery technology - a battery that is lightweight, high on performance, cheap, safe and rechargeable - will not be easy.

As Associate Professor Jim Metson of the University of Auckland, who has been involved in some of the early development work, pointed out, many other companies are chasing the same goal.

Pacific Lithium's chief technical officer, Dr Paul Pickering, said yesterday that some of the largest corporations in the world, mainly Japanese, were on the lithium trail.

"There are some big players - there's no question about it," he said. "Principally in Japan, you would look at Panasonic and Sanyo. It's fairly barren in the US and even in Europe. If you are talking about lithium-ion and lithium-polymer it's pretty much the Japanese."

Others include GS Batteries, the main supplier of lead-acid batteries in Japan, and Yuasa. Toshiba has also talked about moulded polymer batteries and may have some activity under way.

Nevertheless, the rewards are potentially high. Why does Pacific Lithium, a relative minnow in that context, think it can succeed against some of the world's mightiest industrial enterprises?

Firstly, said Dr Pickering, Pacific Lithium supplied around one-third of the Japanese market for lithium carbonate, the raw material which goes into lithium batteries. The company was far more vertically integrated and focused on lithium than most of its competitors, being involved throughout the material's production.

That means that sometimes Pacific Lithium is competing in research and development with its own customers.

Dr Pickering, however, pointed out that most of those customers were developing lithium-ion systems rather than lithium-polymer. "At the moment I think it is reasonable to suggest that we have a leading position in the world in large-footprint lithium-polymer cells, although there is no question people are starting to move in that direction," he said.

Secondly, the company had exclusive access to unique technologies developed at the Massachusetts Institute of Technology. This allowed it to move up the value chain from supplying "commodity" lithium carbonate to materials used in lithium-ion and lithium-polymer batteries.

The real barrier to be overcome is cost.

"I'm probably one of the more bullish people in the world when it comes to lithium batteries," said Dr Pickering. "I honestly believe if you can bring the cost down enough you will find electric vehicles become possible."

The marine market was another target.

"If you are going to buy an electric vehicle based on current prices, the battery alone will cost $20,000. It's not a viable option. You have to bring it down below $5000 and preferably under $3000 to make it viable."

The cost of battery materials needed to be reduced and the yield in production increased, he said.

Materials make up 60 per cent of the final cost of a battery for lithium-ion systems and some producers achieve only a 40 per cent yield.

Since March 1998, Pacific Lithium has focused on developing manganese cathode materials to replace cobalt materials. The product of that research is now being tested in Japan.

The New Economy Research Fund grant will allow that work to be extended to drive down the cost of the other battery components, polymer electrolytes and anode materials.

"It's daunting, but at least we know what we are dealing with," Dr Pickering said. "We never underestimate the task ahead. But we do have a unique business model.

"There are some big people out there but it's a huge market."

Related site:

Pacific Lithium