In the fledgling battery materials industry, two leading players have diametrically opposite views on how the supply chain is evolving. 

The push for battery manufacture in India with production-linked incentives for advanced chemistry cells (ACC PLI), a domestic supply chain for the supply of materials such as anodes, cathodes, separators and electrolytes, is beginning to take root. 

Two of the key players are Epsilon Advanced Materials and Himadri Speciality Chemical. Both are getting into the manufacture of materials for both electrodes—anode and cathode. Both their anodes are cathodes materials are similar—synthetic (or artificial) graphite from coal tar for anodes and Lithium Ferrous Phosphate (LFP) for cathodes. Both companies have said they have home-grown technology for graphite. Both have accessed technology from abroad, by taking a stake in R&D companies. 

Epsilon Advanced Materials, a subsidiary of Epsilon Carbon Pvt Ltd, has announced big investments—₹9,000 crore in Karnataka and $650 m in the US for graphite, and ₹5,000 crore for cathode. For technology for LFP cathode materials, Epsilon took over a German R&D company with 150 patents. Epsilon Carbon is an associate company of JSW Steel—its Managing Director, Vikram Handa, is a son-in-law of JSW Chairman, Sajjan Jindal. 

BSE-listed Himadri Specialty has announced ₹4,800 crore investments into cathode (LFP) materials and ₹780 crore in anode (graphite) materials. The company has also a 13 per cent stake in an Australian start-up, Sicona, which has developed a cutting-edge, silicon-based anode material. Sicona is putting up a plant in the US.  

So, how is the business environment for electrode material manufacturers in India? Not good, says Handa. In a recent chat with businessline, he said that Indian battery manufacturers (such as Reliance New Energy, Ola and Rajesh Exports), after having availed themselves of incentives from the government, are not willing to buy Indian raw materials—they prefer to buy cheaper from China. 

“Not a single battery manufacturer has signed even a non-binding MoU for buying battery materials,” Handa said. This is despite a government requirement to buy 60 per cent of the battery materials locally, he said. 

Asked how they could violate a rule, he said that the (would-be) battery manufacturers defend themselves taking a position that there is no local electrode manufacturer. Handa felt that anode and cathode manufacturers must have an assured offtake assurance to put down investments—something like power purchase agreement for long term supply of power.  

Handa said that Epsilon Advanced Materials’ US plant would soon not only have a firm, medium-term offtake agreement, but the buyer would also part-fund the project. The battery materials supply chain is in its infancy. It must be nurtured by the government and not be exposed to the ruthless Chinese competition. 

The other view

Anurag Choudhary, Chairman, Managing Director and CEO of Himadri Specialty Chemical holds the opposite view. “My views are completely the opposite,” he told businessline. “We have several non-binding agreements offers and we are working towards converting them into binding agreements,” Choudhary said, adding that “the entire world wants to buy from us (India).” 

Choudhary, however, is not keen on getting locked into long-term offtake agreements, where prices are formula-based.  Himadri intends to be in three types of graphitic anode materials—based on natural graphite (from graphite mines), synthetic graphite (from coal tar pitch) and hybrid. On the cathode side, the company is developing a material bringing manganese into LFP. The LMFP cathode “will revolutionize energy storage”. 

“We are getting very good response from potential customers,” Choudhary said, adding that the company did not need off-taker funding.  HEG Ltd, of the LNJ Bhilwara group is another Indian company that has announced (₹1,000 crore) investments in synthetic graphite manufacturing. Hindalco makes separators for batteries, while Neogen and Gujarat Fluorochemicals plan to produce electrolytes.