Epsilon Carbon looks to make cathodes for lithium-ion cells amidst EV boom, ties up with US company

Epsilon Carbon has tied up with US-based The Metals Company to study the feasibility of extracting rare metals used in lithium-ion cells from deep-sea mining as part of its ambition to become a top supplier to companies manufacturing cells for electric vehicles (EV) in India.

Post the feasibility study, the two companies will set up a Rs 1,200-crore polymetallic nodule processing plant in India by 2025, according to Vikram Handa, the managing director of Epsilon Carbon. The nodules, which look like lumps of coal, will be mined from the Pacific Ocean floor by the US-based company and brought to India for processing.

The planned Indian plant will process 1 million tons per annum (MTPA) of dry nodules to create about 30,000 tonnes of raw materials required to manufacture the cathode for Lithium-Nickel-Manganese-Cobalt-Oxide (NMC) cells. NMC is one of the most popular choices of cell chemistry in the EV industry.

The company also plans to further manufacture the cathodes from the raw material and supply them to cell manufacturers. A cathode is the negative terminal of a battery. The 30,000 tonnes of NMC raw material will be sufficient to manufacture cathodes for 25 gigawatt-hour (GWh) equivalent of cells, Handa said.

This comes at a time when the government is promoting the manufacturing of 50 GWh of advanced chemistry cells like lithium-ion in India through a Rs 18,100-crore production-linked incentives (PLI) scheme. Presently, all the cells used in EVs are imported into India, mainly from China.

Companies like Ola Electric and Reliance New Energy Solar have qualified for this scheme, while others like Lucas TVS and a consortium of Toshiba, Denso and Suzuki Motor are also setting up plants in India to make cells for EVs.

The PLI scheme also has strict localisation caveats, which will make cell manufacturers favour local suppliers like Epsilon Carbon.

The company is already manufacturing anodes or positive terminals for lithium-ion batteries. Unlike cathodes, which can be made of different materials based on cell chemistry, cathodes are usually made of carbon – the core competence of Epsilon Carbon.

It has invested Rs 100 crore so far towards making anodes from India and has also signed up with Finland's Beowulf Mining to set up a graphite anode manufacturing facility in the Nordic country. It plans to invest Rs 1,500 crore over the next 2-3 years towards expanding its anode manufacturing in India to 50,000 tonnes per annum, which can support 50 GWh of cells.

The company’s anodes are undergoing qualification testing with about nine global customers and it was also in touch with companies planning to set up cell manufacturing in India, Handa said.

For its anodes, the company has signed a supply contract with New York-based Gigafactory called C4V, Handa said. It was in talks with others too and expects to sign a couple more contracts this year, he said.

The company was in talks with global automakers too, who are keen to secure supplies for their cell manufacturers to ensure a robust supply chain. In fact, the decision to explore cathode manufacturing with The Metals Company was inspired by the demands of these automakers, Handa said.

Epsilon Carbon was also open to strategic investments from its customers to meet the high investments required in this industry, according to Handa.