MNB: pursuing yellow phosphorus production for Li-ion batteries
This morning our 2022 Wise-Owl Pick of the Year Minbos Resources (ASX:MNB) announced it is investigating the feasibility of producing Yellow Phosphorus from its existing phosphate resource in Angola and from new licences under application.
Yellow Phosphorus, also known as P4, is a critical mineral in the battery materials supply chain.
P4 is needed to produce lithium hexafluorophosphate (LiPF6) — the electrolyte used in lithium-ion batteries — that's produced by the reduction of phosphate rock, with silica, coke, and electricity.
A large range of Chinese and European industrial sectors are dependent on P4 as it is also required to produce specialist phosphorus chemicals needed by a very wide range of high-value end-uses. Those include electronics, fire safety, batteries, industrial water and process treatment, technical plastics, pharmaceuticals, lubricants, and metal treatments.
In a positive sign, MNB said that it started looking into producing Yellow Phosphorus “following strong expressions of interest from institutional investors”.
MNB’s intends to investigate the feasibility of using medium grade Phosphate Rock with a high silica content (that’s unsuitable for the fertiliser market and is outside of MNB’s existing mine plan), combined with cheap electricity in Angola to supply P4.
MNB is on track to begin producing phosphate fertilisers this year from its Cabinda Phosphate plant, which is currently under construction.
In order to produce P4 under a Stage 2 expansion, MNB would need to double the capacity of the beneficiation plant. Should it prove feasible, it would cost an estimated additional CAPEX of just US$1.7-3.3M.
The result would be an increase in production from the existing mine and beneficiation plant with minimal additional investment, thereby lowering the cost of Phosphate Rock production for both the phosphate fertiliser and P4 markets.
MNB’s decision to investigate P4 production follows strong interest from international investors and we note that Phosphate Rock is on the EU Critical and Raw Materials List.
What’s Next?
In regards to investigating P4 production, MNB is currently undertaking a desktop study to determine the viability of the Stage 2 strategy.
The company also says it continues to engage with potential P4 partners with a view to securing a technical and funding partner to advance the Stage 2 strategy.
While we consider there could certainly be upside to this venture, our primary focus in the near term is seeing MNB get its phosphate fertiliser plant up and running, ahead of first production.
For more on what we want to see from the company see our recently updated MNB Investment Memo here.
In addition, as announced earlier this week, MNB has released the results of Stamicarbon’s technical study into its green hydrogen/ammonia plant. You can read more on that here: MNB reveals first glimpse of green ammonia project - Financiers now circling.
