Epsilon Carbon expects to sign battery anode supply agreement within 6 months

MUMBAI: A unit of Epsilon Carbon Pvt Ltd expects to sign offtake agreements for lithium-ion battery anode materials for its planned manufacturing plants in the United States and India within the next six months, a top executive said.

Vikram Handa, managing director of Epsilon Carbon, said Epsilon Advanced Materials Pvt Ltd has already qualified customers for commercial production at the two plants and signing take-or-pay agreements with these customers will be the final step before it commits to building the plants.

The anode is the negative terminal of lithium-ion batteries, which power everything from electric cars to electronic devices.

Capacity factory

Epsilon Advanced Materials is seeking to build two plants with an annual production capacity of 30,000 tons, one in the United States and one in India. Handa said that this will be the largest anode material factory outside China and the first factory in India to supply anode materials on a large scale. While the US factory is expected to cater to the US market, the Indian factory will initially cater to export demand, Handa said.

“Today, the total capacity in the United States is 10,000 tons (per year). A company like ours wants to build 30,000 tons (per year),” he said.

Epsilon is also building a similar plant in Finland but is awaiting regulatory approval, which could take about 18 months, he said.

Handa said that while several companies including the Tata Group, units of Reliance Industries and Ola Electric are setting up lithium-ion battery factories in India, no company has yet signed an anode material supply agreement with Epsilon.

“In India, everyone continues to buy from China,” he said. “To be honest, our business is mainly for export customers because we think that is a bigger market.”

He said that the company’s anode material products have been recognized by many customers in South Korea and Japan. Once demand catches up, the company plans to increase production capacity at its upcoming Indian factory to meet demand in the local market, Handa said.

Epsilon Advanced Materials is also exploring setting up a cathode manufacturing facility for lithium iron phosphate (LFP) chemistry batteries in India. While anode materials are similar across most lithium-ion battery chemistries, cathode materials vary depending on the battery chemistry.

Himadri Specialty Chemicals also plans to manufacture cathode active materials for LFP batteries in India.

Epsilon’s expected investment scope is $9,000 crore for its anode material plant and approx. $According to Handa, Rs 5,000 crore will be invested in the cathode plant over the next 6-7 years. At present, the company has invested more than $He said Rs 700 crore was spent on research and development and setting up of pilot plants.

“Healthy demand for lithium-ion rechargeable batteries is providing strong growth impetus for bulk mesophase coke, which is used to make synthetic graphite,” ratings agency Crisil said in a February report on Epsilon Advanced Materials Pvt Ltd. Anode’s predecessor. “Demand will remain healthy over the medium term.”