First Phosphate Targets Quebec Mine to Power Surging LFP Battery Demand

Key Points

• First Phosphate is targeting the growing LFP battery market rather than fertilizer, planning to produce high-purity phosphate from its Bégin-Lamarche project in Quebec for use in phosphoric acid and LFP cathode materials. The company cited projections that purified phosphoric acid demand for LFP batteries could rise to 65–70 million metric tons by 2035.
• The Quebec project has reported a 378% increase in indicated resources to 204 million metric tons, while a preliminary economic assessment estimated a $2.1 billion net present value and 37% internal rate of return. A feasibility study is expected in the first quarter of 2027, with permitting and a final investment decision targeted for 2028.
• First Phosphate says its material has been used to produce and test about 150 LFP batteries, and the company has secured CAD 21.5 million in non-dilutive Canadian government support. It also cites offtake agreements and potential international funding, though mine construction capital was previously estimated at about $500 million.

First Phosphate NASDAQ: PHOS Chief Executive Officer John Passalacqua outlined the company’s plan to develop an igneous phosphate project in Quebec intended to supply the lithium iron phosphate, or LFP, battery market, rather than the agricultural fertilizer industry.

During a company presentation, Passalacqua described LFP batteries as a rapidly expanding battery chemistry used in applications including grid-scale energy storage, data centers, robotics, marine equipment, agriculture, defense, small mobility products and telecommunications. He said electric vehicles represent only a portion of LFP demand, while large-scale energy storage has become a major driver.

Passalacqua said LFP batteries accounted for about 20% to 25% of global battery production when First Phosphate was established in 2022 and now represent 77%, according to figures cited in the presentation. He attributed the chemistry’s adoption to its fire safety, cost, performance characteristics and longer operating life.

Focus on phosphate supply for LFP cathodes

The CEO emphasized phosphate’s role in LFP cathode materials, which also contain lithium and iron. He said phosphate represents 61% of the cathode material composition, compared with 4% for lithium. First Phosphate’s business strategy centers on producing high-purity phosphate suitable for conversion into purified phosphoric acid and ultimately LFP cathode material.

Passalacqua said the current purified phosphoric acid supply chain is largely tied to sedimentary phosphate rock and fertilizer production. In his view, that structure could constrain the availability of battery-grade phosphoric acid because only a portion of production from sedimentary deposits can be upgraded to the necessary purity.

He cited projections presented by Benchmark Mineral Intelligence indicating that purified phosphoric acid demand for LFP batteries could rise from roughly 5 million to 7 million metric tons currently to about 30 million metric tons by 2030 or 2031, and 65 million to 70 million metric tons by 2035. Those figures were presented as estimates referenced by the company.

First Phosphate is pursuing igneous anorthosite phosphate from the Saguenay–Lac-Saint-Jean region of Quebec. Passalacqua said the material is more consistent and contains fewer impurities than sedimentary phosphate rock. He said the company has achieved a phosphate grade of 40.4% P2O5 and a conversion rate of 91.1% to purified phosphoric acid in its process.

Project status and infrastructure

According to Passalacqua, First Phosphate’s Bégin-Lamarche project is designed as an open-pit mine located about 2 kilometers from a major highway and electrical infrastructure. The company has completed approximately 80,000 meters of drilling over three years and does not expect further drilling will be needed for its feasibility study.

He said a recent drilling campaign increased indicated resources by 378%, with the company now citing 204 million metric tons for the feasibility study and nearly 90 million metric tons of inferred resources that could potentially be converted to indicated resources through additional drilling.

The company’s preliminary economic assessment, completed before the stated resource increase, estimated a net present value of $2.1 billion, an internal rate of return of 37%, a 2.9-year payback period and a 1.5-to-1 strip ratio, Passalacqua said. He added that the study used phosphate prices slightly below current levels, though he did not provide specific pricing assumptions.

First Phosphate expects to release a feasibility study in the first quarter of 2027. It is targeting completion of local consultations and environmental processes in the third quarter of 2027, permitting by the first quarter of 2028 and a final investment decision in the second quarter of 2028.

Battery validation and government support

Passalacqua said the company worked with Nevada-based Ultion Technologies Inc. to produce about 150 LFP batteries using phosphate from the Bégin-Lamarche project, as well as North American lithium and iron. The batteries were tested for 2,000 cycles and performed comparably with other batteries in the market, he said.

The company has received Quebec fast-track status and CAD 21.5 million in non-dilutive support from the Canadian government for its feasibility study, road and electrical infrastructure, according to Passalacqua. He said First Phosphate and its phosphoric acid plant were among 13 projects listed under the G7 Critical Minerals Resilience and Production Alliance.

Passalacqua also cited potential support from Denmark for CAD 190 million of capital expenditures and Switzerland for CAD 212 million, with Italian entities also evaluating the phosphoric acid plant. The company has announced offtake agreements for 200,000 metric tons of phosphate concentrate and 60,000 metric tons of phosphoric acid, he said.

First Phosphate has approximately CAD 23 million in cash and access to more than CAD 20 million in Canadian government funding, according to the CEO. He said the company expects those resources to fund operations through the second quarter of 2028. At the preliminary economic assessment stage, mine construction capital expenditures were estimated at about $500 million, he said, with CAD 400 million of potential project capital identified to date.

Responding to a question about processing inputs, Passalacqua said sulfuric acid is required to convert phosphate concentrate into phosphoric acid. However, he said the company’s high-purity igneous rock could require one-third less sulfuric acid than other phosphate feedstocks.

About First Phosphate (NASDAQ:PHOS)

First Phosphate Corp. is a Canadian mineral development company focused on advancing phosphate resources in Quebec, Canada. The company is working to develop an integrated supply chain for lithium iron phosphate (LFP) battery materials, which are used in certain lithium-ion batteries for electric vehicles, energy storage systems and other applications.

First Phosphate's activities include the exploration and development of phosphate properties in the Saguenay–Lac-Saint-Jean region of Quebec, including its Bégin-Lamarche project.

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