January 17, 2022 – On today’s podcast we welcome special guest, Li-Metal Founder & CEO Maciej Jastrzebski. Li-Metal is developing and commercializing technologies that address key challenges in the supply chain of next generation batteries.
On the show, Maciej discusses:
- How lithium metal plays an important role in battery technology
- Advantages of Li-Metal battery tech
- The company’s plans to ramp up commercial-scale production
- The importance of having domestic lithium production
- And more
Subscribe: iTunes| Spotify | Google Play | Stitcher | Overcast | YouTube | Amazon
Transcript:
Welcome investors to The Absolute Return Podcast. Your source for stock market analysis, global macro musings and hedge fund investment strategies, your hosts, Julian Klymochko, and Michael Kesslering aim to bring you the knowledge and analysis you need to become a more intelligent and wealthier investor. This episode is brought to you by Accelerate Financial Technologies. Accelerate because performance matters. Find out more at accelerateshares.com.
Julian Klymochko: Welcoming from Toronto Canada. We have the founder and CEO of Li-Metal. Maciej welcome to the podcast today. I wanted to start out really just going over your background, your career history, you had roles in engineering and management. Number of companies at Barrick Gold. Do you want to discuss your career history prior to launching Li-Metal and what you learned in those positions that helped you ultimately found a new company?
Maciej Jastrzebski: Sure, and thanks for having me, it’s very much a pleasure. So, I started my career at Hatch fresh out school. In sort of the archetypal mechanical engineering role of doing a component and eventually equipment design for a number of technologies related to metal production and it was really a great place to cut my teeth and for really any young engineer to cut their teeth, because you get a lot of responsibility very quickly. You see things through the whole life cycle from concept through implementation. You get to see it built and you get to feel your own mistakes because of course not everything always goes according to plan and then you have to respond and make it work. So, it was a great place to learn.
So, I did that for about six years. The second half of my career at Hatch, a part of the group really within the company that focused on development of new technologies and new products. So again focused, mostly in the metal space, but branching out a bit into energy. And that’s actually where I first started to kind of develop that passion for Cleantech. So, we successfully commercialized a number of technologies, built a really good team there. Worked with a lot of great people, built an IP portfolio. And when I moved to Barrick, it was really to focus on that commercialization piece. So, while I was at Barrick, the main role I was hired to do there was to help them commercialize some of the existing technologies they had developed externally.
So, we did that but the role really kind of grew and I actually helped them manage a development lab, sort of their piloting lab in Vancouver. And that was actually great. It exposed me to a lot of your process piloting. How do you through the different piloting steps, some of the analytical techniques. So, you know, beyond the things you would expect, how to run engineering teams? How to do complex projects? How to do really kind of extreme engineering? There were sort of three things that I took away that really inform what I do at Li-Metal. The first and probably most important one was, you got to think commercially, no matter how elegant a technology happens to be, no matter how beautiful the equipment is or whatever, in the end, it’s got to turn into usually a pretty big plant that runs efficiently, has high up time and most importantly produces whatever it produces at the lowest possible cost.
Julian Klymochko: Right.
Maciej Jastrzebski: And when we approach technology development at Li-Metal. When we’re doing things sort of at the bench and pilot scales, we’re always thinking about what’s the impact that this is going to have on the full-scale plant. You kind of go bottom up and top down all the time. And that’s a process you’re constantly revisiting, so that’s like one. The second one is, we have to start with the fundamentals, but get your hands dirty as quickly as possible. Fundamentals, because nothing doesn’t pass the back of the envelope, calculation is ever really going to be successful. There’s no amount of detail you can add or analysis you can do or engineering you can do on an idea that doesn’t have that core.
But at the same time, you really need to put yourself in contact with the problem. That’s really what under earth all the unknown. That’s what shows you where the constraints are, and really ultimately allows you to solve the problem or move things to the next step. So that’s two, and the third one was a real appreciation for the fact that there’s no person who’s got the full package, everybody’s got something to bring to the table. And when you’re doing anything, you’re building anything, it’s hard, but building something completely new or developing a new technology, that’s many times more difficult. And so, you really need to be careful and build your team accordingly. Nowhere is that more true than sort of at the very beginning and I think I’ve been incredibly fortunate that my co-founder and I think complement each other very well.
Of course, my co-founder is Tim Johnson. Who’s kind of a serial entrepreneur, great business insight also very deeply technical. So, he and I really see eye to eye usually on technical matters, we take slightly different approaches in different areas. And I think those different approaches are appropriate at different time. And so, I think a lot of the reason why we’ve been successful today is just because he and I work so well together. And of course, at the beginning that really sets the tone, really sets the direction for the company. So, it’s been great and hopefully we’ll continue to be so.
Julian Klymochko: That’s a key insight, those three aspects. Thinking commercially, thinking about the fundamentals, then the diversity on the team with different skill sets. So, thank you for sharing that. Now from a high level, I’d like to get into exactly what Li-Metal does and why you founded the company. Investors understand that lithium and battery technology are these massive themes for innovation and for the future, but how ultimately do you plan on commercializing this?
Maciej Jastrzebski: Yeah, so what really drove us to found the company was just that the recognition that there was this looming problem developing in the supply chain, especially, you know, never mind lithium ion battery, which of course we’re pretty familiar with some of the issues there, but, you know, there’s this macro trend of course of electrification, but underlying that is a changeover in technology that’s happening. Lithium-ion batteries have been a lot of innovation on the [Inaudible 00:06:55] pushed up energy density and so forth, but there’s only so much you can do with that. There’s a fundamental step change that’s coming with next generation batteries. And that’s driven by the use of high energy and anode material. So, this is on the other side of the battery, the other electro.
And of course, when you change something that fundamental about a battery, you’re using a different anode material. That means the entire supply chain on the upstream of that or significant portions of it have to be rethought. And so, what we saw was these technologies were coming to fruition, you know, late-stage development, early-stage commercialization. And there wasn’t much thought being given to the supply chain for these critical components. So that’s really where Li-Metal comes in. We’re focused on developing and commercializing technologies for the production of high performance anode for next generation batteries. We’re really aiming to be a midstream player. We’re a supplier to the battery makers. We’re key enablers of that transition to the next generation batteries.
Julian Klymochko: Now, can you tell our listeners what exactly is lithium-ion and what’s its role in battery technology?
Maciej Jastrzebski: Sure. So current lithium-ion batteries use what’s called an [Inaudible 00:08:24] anode. So, what this means in practice is a copper substrate and coded onto that is a engineer to graphite powder. And so, lithium-ion sort of migrate through the electrolyte and they intercalate, which really means sort of stuff themselves in between the layers into the structure of the graphite. And so, the graphite has a certain capacity for holding lithium ions. And once you exceed that, basically you can’t store any more energy. And so, there’s a certain thickness and mass and amount of material that’s associated with that.
When we say lithium metal anodes, what we’re actually saying is an anode that is primary metallic lithium. So, it doesn’t need an intermediary. It doesn’t need a storage medium. It’s actually being stored as the metal itself. So, you can imagine if you have something inside packaging, something, and you get a product inside an Amazon box, obviously there’s a lot of extra material there, so it’s like storing something in that Amazon box is sort of analogous to your graphite interpolation material. With lithium metal anode, it’s just the product, it’s just the thing you want. It’s just the thing that’s going to store energy in your battery. And so inherently what that means is you have a higher energy density battery, and it’s like the capacity is about 10 X, right. So, it’s a significant, significant change. That’s why you’re getting that step change in performance.
Julian Klymochko: Right.
Maciej Jastrzebski: I can add to that. What role does it play? I mean, ultimately, it’s what allows you to get to those longer ranges. It’s what allows you to unlock niches like electric air mobility. When you facilitate these next generation batteries, which have sort of inherently safer characteristics, you unlock that safe. So, the more you can speed up adoption of those batteries, the sooner you get those virtuous characteristics being incorporated into our products.
Julian Klymochko: And we did want to touch on the safety that you mentioned, and also the energy density, but prior to getting into that, I did want to quickly discuss the competitive environment within battery technology. What are you seeing on the lithium anodes outside?
Maciej Jastrzebski: Yeah, so, I mean, if we sort of take a step back. The next generation battery space, you tend to have a pretty broad range of approaches that are being that pursued. So, you have some battery technologies using the Silicon-based or Silicon-rich anodes. You have a whole slew of technologies that use lithium metal, whether that’s in a solid-state battery or a hybrid lithium metal, liquid electrolyte battery, or even lithium sulfur battery. So, there’s this range of technologies that’s out there that’s vying for the next generation sort of market, as I said, the supply chain for those to provide anodes components to those batteries has been sort of late in coming. So, the supply chain for next generation batteries has been understandably slow to develop because of course the technologies are only now just starting to sort of reach the point of commercialization, what tends to happen, or what we’ve seen happen is that we have, let’s say traditional suppliers of battery chemicals have also been the suppliers of lithium type chemicals, including metallic, lithium, and several different forms.
So, most of what’s been done to date has been done on lithium metal foils. So, these groups will produce metallic lithium magnet and they can transform of those into foils. And that’s what’s been incorporated most of the development batteries that have been produced today. As we’re seeing these things approach commercialization. You are starting to see a bit of effort being put towards this. So, let’s say equipment suppliers that are starting to look at that. You’re seeing some of the battery companies also working a bit more on anodes, but generally speaking, I think we’re in a sort of unique position in that we’re trying to develop really a technology stack, something that will allow us to economically provide these materials, these critical materials, or these materials which are critical for next generation batteries. And of course, to do that in an economical way.
Michael Kesslering: And so how are your batteries lighter, more energy dense and safer overall?
Maciej Jastrzebski: Yeah, we’re not a battery producer per se, but because so much of the performance improvement in next generation batteries comes from the anodes, obviously what we do and how we produce our products has an impact on that. So, there’s really two ways. One is, our process, it’s a deposition process. So unlike foils, where you take a big hunk of lithium metal, squeeze it through a dye and then roll that flat. We actually take our lithium, and we deposit it in very thin layers onto the current collector that becomes a component in the battery, so what we’re actually able to do is we’re able to minimize the amount of lithium metal we put in. Lithium foils bottom out, sort of around the 20-micron mark, which means at minimum, you’re putting in 20 microns, usually closer to 40 microns of lithium metal.
We’re able to put in as little as five. We’ve even went down to three and can probably go less than that. So, there’s a natural sort of reduction in the total material that goes into the battery. So that’s one way in which to get sort of volumetrically more energy into a battery. So that’s kind of true for our first-generation products, which really seek to mimic sort of current metallic lithium anodes in a much cheaper form. Our second and third and fourth generation products. Some of the things that we’re working on include substitutions of the substrate material. So rather than using copper, which is quite dense and frankly costly, what we’re working on, have had some success in doing is incorporating rather than a copper, current collector, an aluminum current collector.
And aluminums, you know, about a third of the density of copper. It’s also about a quarter of the cost, so that helps a lot too. But when you reduce the weight of the current collector, of course, again, you’re helping the specific energy of the battery. And so those are some way in which what we do on the product side can influence the ultimate performance of the battery. And I guess on the safety side, I’ll touch on that as well. Again, it’s sort of a matter of enabling these technologies that are inherently safer. So, what we do specifically doesn’t necessarily change the safety profile of the battery, but by enabling these safer batteries, your kind of enabling future battery packs to be made with safer materials.
Michael Kesslering: And then somewhat tied to that. You mentioned less volume substituting aluminum versus copper. Can you also touch on the environmental impact of these decisions and the design that you’re thinking of versus how competitors would put these together?
Maciej Jastrzebski: Sure, I can. And I mean, the first thing is again a material use thing and conserving the resource, right? Production of lithium metal is very energy intensive. Something like aluminum as an energy intensive material. Where lithium on a unit mass is about twice as energy intensive to produce. So, the less lithium you can incorporate into the battery, just from a production standpoint significantly reduces, let’s say, energy use content of the manufactured product. So that’s one way, the other way is actually more on the lithium metal production side. The process that we’re working to scale up and commercialize, which we’ve already sort of proven smaller scales. It uses lithium carbonate as the feed stock material. And when you contrast that with the conventional lithium metal production process that process uses lithium chloride.
lithium chloride. When you split it to get the metallic lithium [Inaudible 00:17:57], you produce chlorine gas. In fact, most people don’t realize is you produce about five tons of chlorine gas for every ton of lithium metal you produce. So, basically, it’s an expensive chlorine gas production process that happens to produce a little bit of lithium on the side. The implications of that lithium or that chlorine gas production are that, you have to capture that gas. It’s highly toxic, highly, highly corrosive. You have to capture it; you have to typically use a scrubber to convert it to another sort of more [Inaudible 00:18:17] product. Typically, you’ll end up with something like a bleach or grin at the end of that process. In some cases, with the bleach, you can use it in some other process, but most of the time it ends up being affect a waste material.
And so just eliminating that portion of that equation really helps with the footprint of the environmental footprint of the metal production process. And of course, the thing works as a whole. So, the total footprint of the anode is reduced as a result of that. I should also note that, just electrochemically. Splitting lithium carbonate is a lot easier. It’s done at a lower energy than splitting lithium chloride. So, there’s sort of an inherent electrochemical benefit that should on, you know, everything else being equal, resulted in a lower energy use at scale when you’re producing that metallic lithium.
Julian Klymochko: So, you’ve touched on the technology and what makes it, you know, more competitive than what is out there in the market. Now, the company is in the scaling up and commercialization stage. Do you want to discuss Li-Metal plans to ramp up commercial scale production? Like what sort of infrastructure does this require? What are the requisite capital expenditures and what can investors expect from that process?
Maciej Jastrzebski: Yes, absolutely. So, we have what I think is a robust commercialization strategy. So, we’re aiming to be at full commercial scale production by 2025. So that’s, you know, at the gigawatt scale. Our approach, generally you can think of it as an entrenched then grow. That’s sort of the phrase we use to encapsulate the strategy. And what that really means is at this stage, what we’re doing is we’re feeding the developers, we’re providing sample materials, we’re satisfying their need to have a high-quality material that they can go and qualify their product with, you know, the auto makers or whoever the end user is of the battery has to be satisfied that it meets certain quality and volume and cost characteristics. So, what we’re really doing now is providing that material for, for that development, qualification process.
And we’re going to do that, you know, in terms of the infrastructure, actually just came back from Rochester like 10 minutes before our talk here. And what we’re doing there now is we’re in the process of commissioning a pilot scale role to roll line that will allow us to produce, on the order of thousands to tens of thousands of meters of anode in the coming year. And that’s feeding into the process. While we’re doing that, we’re already actually in the late stages of engineering for the full-scale equipment, and we’ll soon be beginning engineer on the on the plant. And that’s what I call the commercial scale demonstration plant, which is really like a single unit or a single line that would be then duplicated many times in order to produce a commercial plant so that commercial scale demo plant will really showcase the technology.
It will demonstrate its economic characteristics, it’ll demonstrate its availability, uptime, all of these things. And of course, it’s a much bigger machine. It’s a much bigger production capacity. We’re talking now that’s like about a million square meters of anode, translates to two hundred and fifty, three hundred megawatt hours of equivalent battery production capacity. So now you’re within a really easy scaling business to that gigawatt scale. So, our plan is to have that facility up and running sort of early 2023. So we’re moving quite quickly. So that’s sort of feed the developer’s portion of the strategy. The other key element is to be a reliable local supplier of these materials. So as things move through qualification, and as you have adoption of next generation battery technology, you’re going to see a lot of pressure put on the supply of lithium metal. And that’s why we feel a key element of that is for Li-Metal, to be able to produce its own lithium metal to that end, we’re right now building out a facility just north of Toronto that will house our lithium metal production process piloting line That will have, again, sort of industrially relevant production capacity and industrially relevant scale. We’re really at the point where we’re proving out the equipment that we will eventually be using to produce the final material and assuming that all goes reasonably to plant will be able to then be relatively self-sufficient in terms of lithium metal production for the for the coming couple of years. And of course, you know, that’s to get to the technology to the point where it’s in use, where it’s qualified, it’s starting to be used in a production, you know, vehicle or production application. And at that point, it’s a matter of scaling. So that’s proliferating the technology, that’s where you’re really starting to build capacity and anticipation of demand so that you can be there as needed and, you know, capturing as much of that as possible. So that’s sort of into that 2025 timeframe when you’re really talking about hundreds of thousands or tens of thousands to hundreds of thousands of vehicles per year of equivalent batteries use.
Julian Klymochko: So, a big step in the development of the corporation to fund these massive plans. You recently took the company public and the Canadian securities exchange. What was that experience like? And any tips and tricks that you would give to founders considering taking their company public?
Maciej Jastrzebski: I said, sure. Yeah, well, it’s not an easy undertaking to take a company public. So, it’s quite a lot of work, but look, it’s a huge milestone for us. And I think a tremendous accelerator for the business, you know, sort of around this time last year, we had made the decision to really expand our efforts on anode, development and commercialization. We had some really, really promising results from some of the earlier work we did. And this was by far the best way for us to get the capital into the company needed to really build out that infrastructure that I talked about. I mean, it’s something that has a lot of facets to it. Obviously, it makes it easier to access capital that’s key. I think, in the end, we’re trying to be a supplier to the automotive industry, which means, we need to have technical credibility.
Julian Klymochko: Right.
Maciej Jastrzebski: And I think having years of public disclosure and all of that definitely helps. And I mean, it’s a nice side effect of that is of course that now we’re out, we’re at a fairly early stage and it gives everybody who’s interested in the space, an opportunity to sort of participate in our journey, which we’re obviously very excited about. So, I think it was a great experience, it’s a milestone I’m seeing more in the rear-view mirror now. And that was just about, really focusing on delivering on the vision
Julian Klymochko: And for those investors potentially looking to participate in that vision or even potential customers down the line. What will Li-Metal look like in say 10 years?
Maciej Jastrzebski: Well, I think in 10 years next to generation batteries are just going to be called batteries.
Julian Klymochko: Right.
Maciej Jastrzebski: So, you know, what we’re looking to do is to be a top producer of anode materials and components. I mean, that’s ultimately what what’s driven us. You’ll probably see operations in north America and likely in Europe, sort of at the tens to hundreds of gigawatt hours of scale, really enough where you’re now able to service millions of vehicles of equivalent production. So that’s really what we’re focused on. We want to get there. There’re obviously a few steps before we do get there, but it’s going to come quick and certainly the early stages will be here in a couple of years. So very excited.
Julian Klymochko: And prior to letting you go, one last question from a consumer standpoint, say in the next 10 years, what can consumers such as us expect to be provided from these next generation battery, whether it’s automotive or consumer technology, anything cool in your crystal ball?
Maciej Jastrzebski: Yeah. that’s always hard to make predictions, especially about the future, but I think you’ll see alleviation. I don’t think we’re going to be talking about range anxiety anymore once these batteries come in, I think you’ll see big changes in charging performance. I think we’re not going to be seeing stories about battery fires the way we do today. Those are so of the obvious ones. I think what’s going to be really interesting is, technology always builds on itself, right. So, whenever you have a new capability, like you’ve made a step change in the energy density of batteries, what’s possible now? I mean, in the way that the lithium-ion battery really made the smartphone possible. The lithium metal-based battery will now make a whole slew of other applications either viable or bring them into viability or just create new opportunities.
Again, the sort of clear ones today, you can’t really do effective electric air mobility with current of generation of lithium-ion batteries. You will be able to do that with next generation batteries, same thing with robotics. You’ll be able to do a lot more with robotics than you can today. You’ll be able to do a lot more with drones than you can today with next generation battery. So, I think things will look very different because of that, because we’ll have all of these exciting niches sort of open up that aren’t really possible today.
Julian Klymochko: Well, that’s something to look forward to is flying cars. So, EV projects look pretty cool.
Maciej Jastrzebski: Finally, I mean, we were promised what, was a 2015? if I remember my back to the future 2.
Julian Klymochko: Yeah, exactly. It’s about time.
Maciej Jastrzebski: So, it’s about time.
Julian Klymochko: To the extent that investors want to check out the Li-Metal story. Trading another the ticker symbol, LIM on the Canadian securities exchange. So Maciej, thank you for coming on the show, sharing the Li-Metal story, the technology in your future predictions. Hopefully they come to fruition and wish you the best of luck.
Maciej Jastrzebski: Thank you very much. It was a pleasure.
Julian Klymochko: All right. Take care. Bye everybody.
Thanks for tuning in to the Absolute Return Podcast. This episode was brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at www.AccelerateShares.com. The views expressed in this podcast to the personal views of the participants and do not reflect the views of Accelerate. No aspect of this podcast constitutes investment legal or tax advice. Opinions expressed in this podcast should not be viewed as a recommendation or solicitation of an offer to buy or sell any securities or investment strategies. The information and opinions in this podcast are based on current market conditions and may fluctuate and change in the future. No representation or warranty expressed or implied is made on behalf of Accelerate as to the accuracy or completeness of the information contained in this podcast. Accelerate does not accept any liability for any direct indirect or consequential loss or damage suffered by any person as a result relying on all or any part of this podcast and any liability is expressly disclaimed.
