"Himadri Speciality Chemicals Commits ₹4,800 Crore Investment for Lithium Iron Phosphate Production"

In a significant move towards bolstering the electric vehicle (EV) ecosystem in India, Himadri Speciality Chemicals has unveiled plans to invest ₹4,800 crore over the next 5-6 years. The investment aims to establish a state-of-the-art plant dedicated to the production of 2 lakh tonnes of lithium iron phosphate (LFP), a critical material used in the manufacturing of lithium-ion batteries for electric vehicles. This marks the first-of-its-kind plant in the country.

The project, to be executed by the wholly-owned subsidiary Himadri Future Material Technology, will kick off with a ₹1,125 crore investment in the first phase. The initial phase will witness the creation of a 40,000-tonne-per-annum plant in Odisha, with the entire project targeted for completion within 27–36 months.

Lithium iron phosphate serves as the key cathode material, constituting 52 per cent of the cost of lithium batteries (LiB) primarily employed in electric vehicles. Himadri aims to fund a significant portion, approximately 70–80 per cent, of the investment through internal accruals, striving to achieve a debt-free status by repaying ₹230 crore of debt by March.

Upon reaching full capacity, the company anticipates generating revenue exceeding ₹4,000 crore from the investment. Himadri has already secured raw material supplies of lithium carbonate from various sources, including Australia, South America, and Africa, ensuring ample supplies despite the escalating demand.

While awaiting the evolution of domestic battery manufacturing, Himadri plans to export its entire cathode material production. The company is engaged in discussions to secure approval from eight global battery makers.

Considering the surge in cathode material demand, projected to reach 9.4 million tonnes annually by 2030, the company is also actively working on technology for anodes, another crucial component accounting for 15 per cent of the EV battery cost.

Anurag Choudhary, CMD, and CEO of Himadri Speciality Chemical Ltd., emphasized India's growing importance as a sourcing hub under the "China Plus One" policy, with many global players eyeing the country for diversification. He highlighted the initial stages of various car manufacturers and battery makers establishing plants in India, with a dependence on imports for battery materials.

While acknowledging the government's performance-linked incentives for battery makers, Choudhary expressed optimism about similar benefits for battery material manufacturers, expecting a positive outcome in the near future. Last year, Maruti Suzuki also revealed plans to invest around ₹7,300 crore in an EV battery plant in Gujarat, contributing to the momentum in India's electric vehicle manufacturing sector.

HBL