On 16 January, ICL signed a joint venture (JV) agreement with Chinese cathode major Dynanonic for a new LFP manufacturing facility in Sallent, Spain. Although the initial size of the facility was not revealed, the plot is reported to have an option for expansion at a later date.

The agreement represents a boost for Europe’s total LFP cathode production pipeline, which currently sits at 125ktpy. Not only are more volumes needed, but direct investment and partnerships from experienced Chinese players are crucial if Europe is to produce LFP at volume. Considering all projects, Project Blue forecasts that China will account for 81% of LFP/LMFP CAM supply in 2030, with the ROW accounting for 13% and the remainder falling to Europe and North America. However, many projects in North America and Europe are tier 4 and tier 5 projects with little to no experience in iron-based CAM production. Many will fold, leading China to take an even greater share moving forward.

With this JV, ICL, which licenses Aleees’ LFP production technology for its North American operation, has turned to Dynanonic for its new Spanish facility. If Europe is to move away from its reliance on Chinese LFP CAM exports, then more projects such as this are needed, where there is backing from an experienced producer. Europe is forecast to see an increasing share of LFP EVs as OEMs look to reduce production costs and entice new consumers, leading to increasing demand for the material.

This announcement also follows China’s recent technology transfer restrictions for next-generation LFP technology. It is currently unknown how this will affect ICL and Dynanonic’s new JV and whether the project will be limited to inferior products, although given Dynanonic’s decision to move ahead with the deal, it seems unlikely. Europe represents a major opportunity for many Chinese producers, so it remains to be seen how these restrictions will be implemented and just how far they will go.