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Imperium3 jump starts NY battery 'gigafactory' plan on Alevo deal

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Sold: Imperium3 New York has scooped up insolvent Alevo's battery plant in Concord, N.C., for $5 million.

Source: Imperium3 New York Inc.

Battery startup Imperium3 New York, Inc has completed its acquisition of insolvent Alevo USA Inc.'s manufacturing plant in North Carolina for $5 million, the recently formed consortium has confirmed. The deal, which closed Feb. 22, allows Imperium3 to fast-track its plan to begin producing lithium-ion battery cells for energy storage and electric vehicles at a "gigafactory" in Endicott, N.Y., at a significant discount.

"This will accelerate our process," Shailesh Upreti, chairman of Imperium3, said in an interview. Imperium3's batteries, like Alevo's, use a chemistry that does not rely on cobalt, a battery metal that has come under increasing price and supply pressure.

Alevo, which is liquidating, spent roughly $350 million to convert the former Philip Morris cigarette factory into a lithium-ion battery manufacturing facility, according to the buyer. When the failed company and its affiliate Alevo Manufacturing Inc. filed for Chapter 11 bankruptcy in August 2017, they listed the value of their production assets at $10 million to $50 million.

The companies subsequently converted to a Chapter 7 liquidation process in mid-February, when they revealed that an unnamed bidder had agreed to purchase their equipment and materials.

Cobalt free

Incorporated in 2017, Imperium3 was founded by privately held New York companies Primet Precision Materials, Inc., C&D Assembly Inc. and CCCV LLC., a firm headed by Upreti that owns Imperium3's intellectual property, as well as Boston Energy & Innovation and publicly traded Australian miner Magnis Resources Ltd. As part of the purchase of Alevo's plant, Magnis boosted its ownership stake in Imperium3 to 41%, the company disclosed.

"The Imperium3 consortium is one of only a few new players moving towards capability and production at a GWh scale," Magnis Chairman Frank Poullas said, noting the "strategic value" of the company's cobalt-free technology. Imperium3 will transfer Alevo's equipment in the next three to five months to Imperium3's manufacturing site at the Huron Campus in Endicott, known as the birthplace of International Business Machines Corp.

'Voltage advantage'

Instead of starting production at the end of 2019, as originally planned, the startup now plans to begin manufacturing in 12 to 15 months at the facility, expected to have an initial capacity of 1 GWh. Backed by $7.5 million in New York state incentives and an estimated $5.75 million in state tax breaks, Imperium3 plans to invest roughly $260 million to ramp up the plant's annual capacity to 3 GWh by 2020, said Upreti, before ultimately expanding to 15 GWh.

"Our goal is to build cells and to work with customers to build [battery] packs for automotive or renewables storage," Upreti said. Imperium3 says it is already working with around three dozen companies in the battery supply chain. The company has presold 40% of the first 3 GWh of production, Magnis announced in November 2017.

The company aims to manufacture higher-density batteries that can store more energy than those currently on the market, thanks to the technology's "voltage advantage," Upreti, who holds U.S. patents for battery cells and materials, added. Imperium3 is targeting a density of around 215 Wh/kg with Imperium3's first-generation cell, 300 Wh/kg in its second-generation cell and roughly 380 Wh/kg with its third-generation version. Conventional lithium-ion batteries reach energy densities below 300 Wh/kg, according to a scientist at the U.S. Department of Energy's Advanced Research Projects Agency-Energy.