Phosphate helps grow the food we eat. Its derivatives are used in food processing, water treatment, and industrial products. Now, its expanding role in rechargeable LFP batteries is putting new demands on the supply chain.

Researchers warn that the world could struggle to produce enough of the highly purified phosphoric acid needed for lithium iron phosphate, or LFP, batteries used in energy storage, robotics, and mobility.

The International Energy Agency warns that the world could face a shortage of battery-grade purified phosphoric acid as early as 2030, with China supplying roughly three-quarters of global production, leaving battery makers heavily dependent on a single country.

That looming supply gap is the opportunity First Phosphate is pursuing with its rare, high-purity igneous phosphate deposit in Quebec, aiming to give North American LFP battery makers a new source of this critical ingredient.

First Phosphate is dedicated to building an LFP battery supply chain from its Quebec deposit LFP battery makers, giving North America greater control over a critical battery ingredient, said CEO John Passalacqua.

“As far as I know, we’re the only company that’s 100% dedicated to high-purity phosphate for the LFP battery industry.”

That market is projected to more than double to US$2.5 billion by 2034, according to research firm Reports and Data, as energy storage and mobility applications drive demand for battery-grade phosphoric acid. 

Benchmark Mineral Intelligence projects a global shortage of 800,000 tonnes of battery-grade phosphoric acid by 2030, with its head of forecasting, Jessica Roberts, warning: “Securing sources of PPA supply outside of China will be necessary for Western gigafactories.”

First Phosphate’s starting point is Bégin-Lamarche in Quebec’s Saguenay–Lac-Saint-Jean region. Its deposit contains igneous phosphate with very low levels of impurities, making it suitable for processing into the purified phosphoric acid used in LFP batteries.

LFP batteries are rechargeable lithium-ion batteries whose cathodes, the positive electrodes that help store and release energy, contain lithium, iron, and phosphate.

“In the cathode of the LFP battery, there is 4% lithium, 35% iron, but a full 61% phosphate,” said CEO John Passalacqua, illustrating why management sees phosphate as a significant battery-market opportunity.

Testing indicates that Bégin-Lamarche concentrate can be converted into battery-grade phosphoric acid at a 91.1% conversion ratio. The company has also worked with partners to follow its phosphate material through the processing chain into finished LFP battery cells.

“We wanted to prove that we could make LFP batteries from our mineral resource,” Passalacqua said. He said the partners produced approximately 150 cells and tested their performance over 2,000 charging and discharging cycles.

“We were surprised. We didn’t expect it, but they actually performed just like any other battery that one would be buying out of China,” he said.

Bégin-Lamarche now contains approximately 204.7 million tonnes of measured and indicated resources grading about 6.05% phosphorus pentoxide, the standard measure of phosphate content. Another 89.5 million tonnes remain in the inferred category.

Indicated resources increased 378% from the previous estimate during the last drilling campaign, providing much more material at the level of geological confidence needed for feasibility planning.

“The mineralogy is continuous. It’s homogeneous,” Passalacqua said. “We feel that it’s going to make for simplified metallurgy potentially.”

Management’s immediate focus is the feasibility study, expected in the first quarter of 2027. The existing preliminary economic assessment outlined a C$2.1-billion net present value, a 37.1% internal rate of return, and a 2.9-year payback over a 23-year mine life. Feasibility should update those preliminary estimates through more detailed engineering, mine planning, and cost analysis.

“Customers are already part of the development plan as announced at the G7 Leaders’ Summit this past June,” said Passalacqua.

First Phosphate has definitive purchase agreements covering at least 200,000 tonnes of phosphate concentrate annually from Bégin-Lamarche and at least 60,000 tonnes of phosphoric acid annually from its proposed Port Saguenay facility.

“The offtake agreement is definitive and bankable,” Passalacqua said of the concentrate agreement. “It de-risks the mine because it tells you that there’s already an active customer for it once the mine is open.” The company received an initial US$530,000 customer prepayment in February 2026, providing commercial validation before production begins.

The next task is securing the money to build the mine, which the preliminary economic assessment estimated would cost C$675 million.

Denmark’s Export and Investment Fund has indicated potential loan-guarantee support of US$170 million, while Swiss Export Risk Insurance has indicated support for approximately US$212.5 million in financing tied to purchases of Swiss equipment and services.

Canadian government non-refundable and non-dilutive contributions of approximately C$21.5 million are also helping fund feasibility, technical work, and planning for roads and power access. Passalacqua expects construction-financing discussions to accelerate once the feasibility study is complete.

That financial backing reflects a wider push to secure battery materials outside China. Last June, First Phosphate’s mine and proposed phosphoric acid plant gained recognition through the G7 Critical Minerals Resilience and Production Alliance, strengthening the company’s international profile.

“We’ve got a great deposit and it’s getting towards feasibility…we are at the right place at the right time…It’s all coming together,” said  Passalacqua.

Following First Phosphate’s Muskoka Top Pick selection, CEO John Passalacqua spoke about the company’s core asset, development strategy, and next milestones.

“If you look at what has been accomplished by the company, even in the last four months, it’s almost astonishing. Our progress is drawing a wider audience and the shareholder base has grown from approximately 1,300 to 12,500 over the past year.

The G7 recognition was a turning point. It brought First Phosphate into a broader international effort to secure battery materials, opening discussions with governments and financing institutions beyond Canada.”

“Energy storage and data centres are among the markets we see growing rapidly. We’re also seeing opportunities in robotics, factory automation, and mobility, from electric vehicles to bicycles and drones.

All these applications use the same core LFP battery material, which requires purified phosphoric acid. That gives us several potential sources of demand rather than depending on one industry.

For investors, that’s an important part of our story. We’re developing a resource that can supply a common ingredient across many battery applications. As those markets expand, we believe there’s a strong need for a reliable North American supplier.”

The next major milestone is our feasibility study, expected in the first quarter of 2027. That will give investors a clearer picture of what the mine will cost to build and operate, how much it can produce, and the returns we can expect.

We have approximately C$43 million in combined treasury and access to government funding. We expect that to carry us through feasibility, permitting, and work toward a final investment decision, without needing another capital raise unless it’s truly strategic.

Construction will require a separate financing package, and we expect those discussions to gather pace once feasibility is complete. 80% of the current CAPEX estimate is already in place by the Danish and Swiss governments.

We’re targeting permitting during 2027 and a final investment decision in early to mid-2028.”

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