04:55 PM EDT, 06/27/2024 (MT Newswires) -- Arianne Phosphate ( DRRSF ) on Thursday released said a prefeasibility study (PFS) for a purified phosphoric acid (PPA) plant at its Saguenay, Quebec, operations, supports construction of a $1.65-billion facility to produce battery-grade phosphoric acid for use in the lithium-iron-phosphate batteries .

The facility would be capable of producing 350,000 tonnes annually of PPA, making the plant the largest producer outside of China. At 350,000 tonnes, Arianne's supply could address roughly 350 GWh of yearly Western gigafactory demand, the company said.

Forecasts from industry analysts see a significant shortage of PPA by the end of the decade as traditional demand from food additives and surging demand from the LFP battery greatly increase the needs for PPA beyond current supply.

The facility would also produce 220,000 tonnes per year of a secondary phosphoric acid used in the production of specialty fertilizers and animal feeds. The market for this product will also be facing severe restrictions as current producers of this product are limiting their output due to operating constraints.

"Opportunities like this don't come along often," said president Brian Ostroff in a statement. "Access to a high-quality phosphate concentrate, the ability to economically produce PPA for use in specialty applications and the advent and growth of the LFP battery provide extremely compelling economics with a pre-tax NPV of over US$4.5 billion."

The company's shares closed unchanged at $0.25 on the TSX Venture Exchange.