It has been a big week for Sydney-based lithium-ion battery (LIB) cell maker Magnis Energy Technologies (ASX: MNS), with a $20 million funding injection through a convertible note issue to two US-based institutions – The Lind Partners and SBC Global Investment Fund – and an additional binding contract with a US government supplier. The latter announcement, for US$74 million over four years, brings total minimum binding sales agreements for Magnis’ extra-fast charging (EFC) battery cells, to be made initially at its plant under construction in New York state, to US$729 million, or almost $1 billion.
Notably, for the Australian media, the involvement of The Lind Partners was brokered by that firm’s advisor John Hancock, son of Hancock Prospecting’s Gina Rinehart, the nation’s richest person. Both Hancock and his mother were investors in lithium prospect Vulcan Energy Resources, one of the best-performing ASX stocks in recent years.
“The main drawcard for these two investors was how close we were to production out of our New York lithium-ion battery (LIB) plant,” says Magnis executive chairman Frank Poullas. “It’s great to have local New York-based investors getting behind a New York project. For us, one of the reasons we chose both of those groups was that they can also open a lot of doors for us in the New York investment community as well.”
As part of that $20 million investment, Magnis is investing $13 million into the battery plant, and proposing to list the entity that operates it, IM3NY, which is majority-owned by Magnis. “We believe a New York listing (it is considering both the New York Stock Exchange and Nasdaq) is where we’ll get the greatest valuation for IM3NY, and will also help us with our growth plans. We want to scale-up to double-digit gigawatt hour (GwH) production; by listing in the US, that gives us the best chance. We thought this was actually an opportunity to increase our stake in IM3NY, prior to any listing.”
The new binding sales agreement “shows that our production in New York is getting closer, “says Poullas. “Total construction is now at 17.85% complete. Those contracts kick in next year. At the end of this year, once we get to that semi-autonomous scale, that’s when we start hitting semi-serious production numbers, and by about March or April of next year, we start getting fully automated production happening, and as the year goes on, we will start hitting GwH scale – which is really serious in the marketplace,” says Poullas.
The big opportunity for Magnis is that both the energy stationary-storage and EV (transportation) markets in the US – and the rest of the developed world – are extremely keen on having a supply chain that is secure, and independent from China, which dominates the market.
“That’s something that we see as being a huge advantage for us in moving forward,” says Poullas.