Epsilon Carbon expects to sign battery anode supply deals in 6 months | Mint

Mumbai: Epsilon Carbon Pvt Ltd’s subsidiary expects to sign offtake agreements for lithium-ion cell anode material in the coming six months for both its planned US and Indian manufacturing units, a top executive said.

Epsilon Advanced Materials Pvt Ltd has already passed customer qualification for commercial production at both the sites and signing take or pay deals with these customers will be the final step before it commits to plant construction, according to Vikram Handa, managing director at Epsilon Carbon.

Anode is the negative terminal of lithium-ion batteries that power everything from electric vehicles to electronic devices.

Capacity plants

Epsilon Advanced Materials is looking to set up two 30,000 tonnes-per-annum capacity plants—one each in the US and in India. These will be the largest facilities for anode material outside of China and the first plant to supply anode material at scale in India, Handa said. While the US unit is expected to cater to the American market, the Indian plant will initially cater to export demand, according to Handa.

“Today, the total US capacity is 10,000 tonnes (per annum). A company like us wants to build 30,000 tonnes (per annum capacity),” he said.

Epsilon is working on a similar plant in Finland too, but awaits regulatory nod, which could take about 18 months, he said.

While multiple companies like the Tata Group, a unit of Reliance Industries and Ola Electric are setting up lithium-ion cell plants in India, no company has yet signed a supply agreement with Epsilon for anode material, according to Handa.

“In India, everybody continues to buy from China,” he said. “To be honest, we have been building our business mainly on export customers because we see that as a bigger market.”

The company has qualified its anode material product with several customers in Korea and Japan, he said. It has planned additional capacity in the upcoming Indian plant for the local market once demands catches up, according to Handa.

Epsilon Advanced Materials is also exploring setting up cathode manufacturing facilities in India for lithium-iron-phosphate (LFP) chemistry cells. While the anode material is similar for most chemistries of lithium-ion cells, cathode material varies with cell chemistry.

Himadri Specialty Chemicals also has plans of manufacturing cathode active material for LFP cells in India.

Epsilon envisages investments to the tune of ₹9,000 crore for its anode material plants and about ₹5,000 crore for cathode plant over the coming 6-7 years, according to Handa. The company has so far invested upwards of ₹700 crore towards research and development and setting up pilot plants, he said.

“Healthy demand for lithium-ion rechargeable batteries provides strong growth impetus for bulk mesophase coke, which is a precursor to manufacture synthetic graphite anodes,” rating agency Crisil said about Epsilon Advanced Materials Pvt Ltd, in a report in February. “Demand will remain healthy over the medium term.”