Lithium Growth in the Energy Storage Market Soumitra Purkayastha FMC Corporation Lithium Division
Lithium Growth in the Energy Storage Market Soumitra Purkayastha Director, Resource Development FMC Lithium 2
Disclaimer Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 These slides and the accompanying presentation contain forwardlooking statements that represent management s best judgment as of the date hereof based on information currently available. Actual results of the Company may differ materially from those contained in the forward-looking statements. Additional information concerning factors that may cause results to differ materially from those in the forward-looking statements is contained in the Company s periodic reports filed under the Securities Exchange Act of 1934, as amended. The Company undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. Non-GAAP Financial Terms These slides contain certain non-gaap financial terms which are defined in the appendix. In addition, we have provided reconciliations of non-gaap terms to the closest GAAP term in the appendix. 3
FMC Corporation LTM ending December 31, 2010 ($ millions) FMC Corporation Revenue: $3,116 EBITDA: $670 Margin*: 21.5% Industrial Chemicals Revenue: $1,055 EBITDA: $196 Margin*: 18.5% *EBITDA margin Specialty Chemicals Revenue: $825 EBITDA: $218 Margin*: 26.4% Agricultural Products Revenue: $1,242 EBITDA: $331 Margin*: 26.6% 4
FMC Lithium Summary #2 producer in world (revenue basis) Integrated operational footprint: 5 production sites worldwide R&D presence in U.S., India, China One of world s top lithium resources FMC Lithium Global Sites Industry Innovator: Unique brine process technology Proprietary cathode development Market leader: #1 supplier: LiOH, LiCl, specialty salts Leader in downstream metals, organics Salar del Hombre Muerto Commitment to the industry: First carbonate supply to Li Ion batteries Argentine expansion(s) underway 5
FMC Market Share and End Markets Global Market Share (US$) FMC Lithium Markets (US$) SQM 18% Other 18% FMC 27% Rockwood 37% Polymer 28% Synthesis 18% Energy 26% Industrial 28% FMC is the world s second largest supplier of lithium chemicals FMC markets a broad range of products that serve diverse and growing markets led by strong growth in energy storage 6
Global Lithium Demand Overall ~10% AAGR Transportation: >30% CAGR New applications: ~25% CAGR (2015-2020) Consumer electronics: ~10% CAGR Conventional market will continue to grow steadily at ~3% AAGR Consumer electronics and transportation will grow annually at 10% and 35%, respectively Transportation segment includes a broad class of vehicle types beyond just passenger cars Sources: SignumBOX, IDTechEx 7
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Electric Transportation Electric Two- Wheeled Vehicles Typical Lithium Content: E-bikes: 0.4 kwh battery; 0.3 kg LCE/vehicle E-scooters: 0.1 kwh battery; 0.07 kg LCE/vehicle E-motorcycles: 0.7 kwh battery; 0.5 kg LCE/vehicle Penetration Rates and Total Fleet Size: 2015: Overall 50%; 15 million vehicles 2020: Overall 60%; 35 million vehicles Light Duty Vehicles Typical Lithium Content: EV: 0.6 kg/kwh; 20~25 kwh battery; ~15 kg LCE/vehicle HEV: 0.6 kg/kwh; 3~4 kwh battery; ~2 kg LCE/vehicle PHEV: 0.6 kg/kwh; 16~20 kwh battery; ~9 kg LCE/vehicle Penetration Rates and Total Fleet Size: 2015: EV: 0.65%, HEV: 0.55%, PHEV: 0.3%; 1.3M vehicles 2020: EV: 2%, HEV: 4%, PHEV: 1%; 7 million vehicles Electric Buses Typical Lithium Content: E-bus: 1 kg/kwh; 180~200 kwh battery; ~200 kg LCE/vehicle Hybrid bus: 1 kg/kwh; 20~25 kwh battery; ~20 kg LCE/vehicle Penetration Rates and Total Fleet Size: 2015: E-bus: 3%; Hybrid bus: 5%; 40,000 vehicles 2020: E-bus: 7%; Hybrid bus: 13%; 150,000 vehicles Sources: SignumBOX, IDTechEx, Boston Power 9
Grid, Solar, and Nuclear Applications Grid Storage Application: Li-ion batteries are being used for: Storing power generated from intermittent sources Stabilizing the grid by acting as a buffer for peak demand Enhancing efficiency of assets on the grid, thus improving power generation and supply economics Total of >50 MW ongoing projects in the US and South America Solar Thermal Application: Lithium salts used as working fluid in utility-scale concentrated solar power (CSP) plants: Maximize heat transfer fluid performance while minimizing material cost Provide chemical and thermal stability Overcome the drawbacks of the currently used organic compounds Globally, CSP is estimated to grow from 1.5 GW in 2010 to 5.5 GW in 2015 and 25 GW in 2020 Nuclear Application: The Japanese RAPID fast reactor design concept uses lithium coolant as a reactivity control mechanism : Simplify the operation of a nuclear plant Help commercialize micro-nuclear power plants Sources: Sandia National Laboratory, CSP Today, Altran, Greenpeace, IEA 10
Lithium Demand and Supply Present producers have the most favorable economics and assets to meet industry demands today and in the future Currently producing assets have the reserve capacity to meet future market demands 11
US$/Kg Relative Cash Costs by Lithium Source 5 4 3 2 Spot Price for Li 2 CO 3 * 1 0 Existing Brine New Brine Mineral-based Estimates include a range in costs depending on lithium deposit quality, logistics, energy costs and other factors Mineral based conversion including spodumene, petalites and clays have higher energy and processing costs than brine sources Newer brine sources vary widely in quality, lack economies of scale and do not have experienced lithium industry developers/operators * Shaded portions represent a range in costs 12
Capital Efficiency * Development costs high for new projects due to remote locations and infrastructure required Current producers can expand with very low capital requirements due to existing infrastructure and economies of scale Economics for new projects often based on unrealistic pricing models. Payback periods questionable * Shaded portions represent a range in costs Source: First Analysis 13
FMC s Commitment to the Industry 2011: Expansion of Li salt production 30% increase over current levels Actively working on second phase capacity addition 2008: Opened Center of Lithium Energy Advanced Research (CLEAR) Lab Constructed laminated Li-ion cells; trained industry and academia in Li safe handling Developing customized solutions for major energy storage device manufacturers 2004: Developed revolutionary Anode lithiation technology (SLMP) Stabilized Lithium Metal Powder (SLMP) Improves energy density of Li-ion cells, increases calendar life, and reduces cost 1995: Entered Cathode market as advanced materials supplier Developed significant intellectual property for LiCoO 2 and LiNiO 2 families. Licensed LiCoO 2 technology to Umicore in 2011 Developed unique composition enabling high rate capability and low impedance build 1991-1992: Entered market as Li salts supplier First to supply carbonate to SONY for their lithium cobaltate production Became a leading supplier of hydroxide to battery market 14
Addressing New Product Requirements Li Carbonate Industrial Grade Technical Grade Micronized Technical Grade Battery Grade Micronized Battery Grade Li Hydroxide Technical Grade Battery Grade Electrochemical Grade Li metal Stabilized Lithium Metal Powder (SLMP ) 15
Electrodes for Li-based Storage Batteries Technology Update
Source: US Dept of Energy
Challenges from an EV perspective LiCobalt Oxide system Unsuitable for EV because of safety LiNickelate system Poorer safety and cycle life LiSpinel system Relatively low energy and inadequate life LiIron Phosphate system Relatively low energy LiTitanate system Low cell voltage needs high energy cathode to compensate 20
SLMP - A Revolutionary Technology from FMC FMC`s Stabilized Lithium Metal Powder (SLMP ) Technology addresses a number of challenges faced by Li-Ion Storage Battery Manufacturers