Episode 3, Game Changers and Transition makers: Charting a sustainable future through clean tech solutions

Elena Lambros:

Hello, and welcome to ESG Matters at Ashurst. I'm Elena Lambros, an Ashurst risk advisory, climate change and sustainability partner. Welcome to today's episode of Game Changers and Transition Makers. In this series, I'll be speaking to entrepreneurs around the globe who are at the forefront of driving the sustainability agenda through innovative business ideas and company startups.

In this episode, I'll be joined by Christiaan Jordaan, founder and CEO of Sicona. Christiaan is an experienced entrepreneur in the resources and energy sectors. He has worked in the financial services industry. And before pursuing his passion for clean tech and material science, he was managing director of an ASX-listed Junior Mining company, with projects in Mozambique. Christiaan is driven by a vision of helping to cool the planet by increasing access to high-performance, cost-effective battery materials. He is working towards helping the world transition to a sustainable energy future. And it's great to have him here today on the podcast.

Welcome, Christiaan. I thought it would be really useful for our listeners if you could just start by telling us a bit about yourself and your business that you're in at the moment at Sicona.

Christiaan Jordaan:

Yeah, it's great to be on. Sicona is a battery materials technology and manufacturing company based down in Wollongong, is our headquarters. We currently have 27 people working for the company, and growing fast. Started the company in 2019 with some foundational intellectual property out of the University of Wollongong. So we're taking translational research out of the uni into the real world.

What we're all about is taking a next generation high energy density battery materials, so it's materials-based technology. We're taking silicon carbon based battery materials into existing lithium ion batteries. So it's a material that's dropped into the making of today's lithium ion batteries, I'm getting a little technical, on the anode side of the battery. So thinking of a lithium ion battery like a cake, we add a special ingredient into the making of one layer in a lithium ion battery cake. And that special ingredient increases how much energy you can store in a lithium ion battery, which in turn has a very, very positive impact on how that gets used in, for instance, in electric vehicles, so you can drive further in your EV. And the other major impact is the cost. Upfront costs can be reduced, so you reduce the cost of energy storage. And third aspect is also you can charge your battery faster by using this material. So it's really aligned to the EV transition and electrification of transport.

Elena Lambros:

Definitely a good business to be in now and an incredibly important business, like the focus on EVs and the focus on the energy transition. How did you come about this business, and what were you trying to look at addressing as part of it?

Christiaan Jordaan:

Yeah, so it's a long story in its full telling, but I'll give you the short version. Came over from South Africa, as you can pick up. I wasn't born and raised in Wollongong, but I came over from South Africa in 2016. At that stage, my previous company I co-founded, we were developing mining and energy projects in Southern Africa. So one of the projects that we discovered in Mozambique was a graphite deposit. And we'd listed the project. After doing some early work ourselves, we listed it on the Australian Stock Exchange, raised some capital and developed it.

And that really opened my eyes and that process opened my eyes to what happens with graphite. And coincidentally, it gets used in batteries. So that's where I started getting a taste for the battery supply chain. And in 2018, 2019, I really got into researching what is next, what are the technologies that are out there? Because graphite is something that's dominated by China. So they process almost 100% of graphite for lithium ion batteries and they dominate that part of the supply chain.

So I wanted to change that. I wanted to build a business in Australia using Australian resources and found this IP at the University of Wollongong, started going down into the rabbit hole of silicon and how wonderful a material it is and what it can be used for. So that was really the genesis. I wanted to do something in the battery supply chain to change the dynamic around, I guess, over-concentration, number one, and two, I really felt like we were at an inflection point where EVs were going to take off and we needed to bring technology to the table, do things better, get more bang for your buck, so high energy density, those sort of thematics. And that's how I really stumbled upon the research at the uni. And the rest is history, in a sense.

Elena Lambros:

Well, I think Australia's lucky that you came out here and ended up in Wollongong. So just wanting to focus on that part of the EV market, I know Australia has been a little bit slow to the uptake with EVs. Starting to see that increased focus now. And obviously there's a lot more options on the market, which I'm hoping will also encourage consumers to look at EVs on their next purchases. In terms of your supply chain, is it really focused on Australia, or is it international? Where do you kind of see your demand for this component of the battery?

Christiaan Jordaan:

Unfortunately, yes, you're right, Australia's a little bit slow on the uptake of EVs, we're getting there, but even slower on actually manufacturing vehicles or manufacturing lithium ion battery cells and those components. That's becoming more of interest, but we are a little bit late to that party. So the major traction that Sicona has had thus far has been overseas, and everywhere from Asia, the traditional powerhouse of China and other Southeast Asian markets, through to Europe, and especially in the United States.

So for our first stage of commercialisation beyond where we are now, we're currently a pilot manufacturing stage, we are looking to actually build our first commercial scale manufacturing facility in the United States. There's a lot of custom attraction and interest for us to manufacture the material domestically in the United States and supply it to cell manufacturers and automotive companies in the U.S. market. But there's also a lot of policy support. So the Department of Energy is administering a lot of money, grants and loans, to bring onshore their parts of the battery supply chain. And Australia is now, and the rest of the world's realising they need to also compete, I guess, and participate. And Australia's doing something similar through the National Reconstruction Fund. So we are waking up to the opportunities. We are very much committed to Australia and to being a major participant and Australia becoming a big player in the lithium battery supply chain beyond just digging up minerals. So we see a future where we will manufacture our materials in Australia, and that's part of our mission.

Elena Lambros:

Great, thank you. And I just wanted to touch on that, because I know America is attracting a lot of investment at the moment. Obviously, they've got the Inflation Reduction Act, which is essentially just really focused on the energy transition and the materials that are needed. Being based in Australia and having access to the impact of those policies in America, has that been a good easy way of doing business? I mean, have there been any challenges around that? It's great to have that relationship with the U.S. and being able to do it from here.

Christiaan Jordaan:

Absolutely. There's a great benefit actually doing it this way, because we're out of the noise of places like Silicon Valley and accessing talent. One of the major challenges of building a company like ours and building this supply chain and technologies and everything around it is access to talent. And because we're one of the leading companies in Australia doing this, we sort of get the pick of really talented scientists, engineers, et cetera, to build our company outside of the noise of places like Silicon Valley, which is a big advantage. However, on the flip side, it's also the tyranny of distance is a challenge. So it's hard to manage a project and building out commercial scale manufacturing in the U.S. when you are based in Australia. It's not insurmountable, but it's a challenge.

And then there's I think the lower cost of doing our fundamental research and innovation pilot scale manufacturing that we've done thus far here in Australia. We've been able to do it a lot cheaper in terms of rents, and other sort of overhead costs are much cheaper than, again, the Bay Area as an example. So that's a big advantage. And then there's the other advantage, which people don't realise how big a difference that makes, but our research and tax incentive program that's been running for decades, I think, is a major benefit to a company like ours, which our colleagues in the U.S. don't actually have access to. They have access to many more sources of funding, but I feel that R&D tax incentive program is a great Australian ... I'll call it innovation and program that helps innovation.

Elena Lambros:

Yeah, no, that's great. And it's actually nice to see Australia highlighted as having that sort of innovation here, because I think there is so much focus on the Inflation Reduction Act. You can lose sight of the fact that there are actually opportunities to build and focus on this here in Australia. So just picking up on your point around access to talent, I know you're quite strong in your company in terms of STEM and focusing on supporting that kind of industry in Australia. Would that be correct?

Christiaan Jordaan:

Yeah, that's 100% correct. Those are sort of long-dated investments to increase the uptake of STEM, especially in the transition from high school to university. And we have strong collaboration with universities, from the University of Wollongong, strong partnership there. They're a shareholder in our business. We're proud of the work we continue to do with them on a number of research projects. But then also UNSW, Deakin University, other universities across Australia, we have very strong programs we're working in supporting with those unis.

But I think the challenge we're seeing is not the postdoctoral or PhD level, it's really getting the undergraduate dedicated programs ... Something that we've had discussions early stages with UNSW as an example. They brought undergraduate in solar engineering and science degrees at an undergrad level. We need something like that at for battery science and engineering. That's something that we are missing to really drive our natural advantage of very smart students to then go into that undergrad and not have to go all the way through to ... We don't actually want people to go all the way through to postdocs. We want them to come work for us after they finish their undergrad, but they just need to do relevant undergrads.

Elena Lambros:

Yeah, absolutely. I'm sure you have a lot of demand for people wanting to come work for you as well. Another thing that I think is really key, particularly in the battery space, and I think is starting to get a bit more attention now, is when I think about the energy transition, I think it's not just about the focus on reducing emissions right now. I think it's about the end-to-end of the impact across the supply chain. So I'm thinking about when you manufacture them, what are the impacts there, and then your end of life, particularly, what do you do with that? So there's a whole lot of considerations rather than just that kind of immediacy when the battery's in the EV, and obviously reducing emissions. I know your company's quite focused on that, so I don't know if you wanted to expand on sort of things that you think through to address those challenges.

Christiaan Jordaan:

Yeah, we're very passionate about that. And you hit the nail on the head with your statements just now, that we're actually quite forward thinking, I would say, for a company of our size, almost 30 people. We've got a full-time head of sustainability that we recently appointed. And she's leading our efforts on making sure that we measure from an early stage what our CO2 footprint is, what's our impact on the environment, how can we actively engage with our supply chain, raw material supply chain, site selection, use of electricity, for instance, trying to reduce our impact. And we've just actually completed our first life cycle assessment for our planned U.S. facility. And we've got a baseline of what our impact is in terms of kilograms of CO2 emissions per kilogram of product produced. Because ultimately, think about it, it's not good enough just to produce the materials and get it into electric vehicles and for us to all drive EVs. We actually need to go quite a few steps further to ensure that we minimise the actual CO2 footprint.

We can't repeat the sins of the fossil fuel industry. We have to do way better and minimise ... there will never be zero, but minimise our CO2 footprint, minimise our environmental impact, make sure it's fair wages and all of the key ESG metrics addressed from day one, which we are doing. So we are very, very passionate about that point and we proudly ... we can't publicly yet say the numbers, but we've significantly lower impact on using our product, our silicon carbon product. CO2 intensity is very significantly lower CO2 intensity than existing graphite-based anode materials, and even better than competing technologies that use a more expensive CO2-intensive raw material than what we use. So we really see it as a selling point, the sustainability aspect and ESG aspect of our business.

Elena Lambros:

Yeah, excellent. I love that, because I think it's so important. And like you said, we should be learning from what happened with the previous industry and the fossil fuels. We should know better at this stage, I would think, given all the focus. And then just quickly, if you could just touch on the end of life of batteries? I know that gets a lot of press as well, around what happens at the end of life and long-term impact of that.

Christiaan Jordaan:

I'm glad you raised that again. Thanks. And sorry for not answering it in the first part of the question. I got carried away there. Yes. It's a very important thing that ... Actually, name-dropping a little here, in Wollongong, we had Sir Ian Botham, the cricketer and representative of the UK government come visit. And he actually came to see us at Sicona. We got a photo op with him, myself and my co-founder. But one of his questions, he straight up asked us, one of the first things is, "What happens to batteries when the vehicle is dead? And what are we going to do with all this battery waste, et cetera?" I'm like, "No, no, no. Relax, Sir Ian. This is a solved problem, which is" ... Exactly. And it's actually what makes me proud to be in this industry. We are solving this problem at the start of this new EV revolution, EV transition.

So there are major battery recycling companies already up and running, if you look in China yesterday. But if you look in the West, companies like Redwood Materials, the founder of that company left ... He's the co-founder of Tesla, JB Straubel. He left Tesla because he believes in the mission of recycling. So he left Tesla to do that. And they're building a battery recycling business. And there are quite a few others, Ascend Elements, et cetera, that are already setting up. So that is already, I would say, a solved problem, technically. And the infrastructure is being built.

So at the moment, those guys are staying alive by treating the battery scraps. When they manufacture a lithium ion battery, not all of it makes its way into passing certifications. So you have a lot of scrap material on site. So they are actually treating that scrap and reintroducing it at the front end, but they are waiting for the day when a lot of EV batteries are at end of life, and then that can be retreated.

But actually before you get to end of life for an EV battery, it's basically 80% charge remaining when they say, "Okay, now you're basically end of life for an EV." But that battery is still very good for, say, energy storage applications for your home energy storage. So there is another Aussie company, Relectrify, that's got amazing technology to take those EV batteries, repurpose them and put them into packs for energy storage for home or small grid applications. So a lot of innovation in that space, absolutely a solved problem. And one of the reasons we should actually champion EVs is because that circularity is built in from day one.

Elena Lambros:

Yeah, that's fascinating. And I think that message should absolutely be getting out there more, because people don't seem to realise that that is technology that's ... already have a solution to it. So that's absolutely excellent. And then just back to Sicona for a minute, what does success look like for Sicona?

Christiaan Jordaan:

I would say success-wise is achieving our mission, which it's like climbing Everest. So we're maybe at advanced base camp, or we've gone camp one, whatever. We're still at the foot of the mountain, if you will, but we're ascending the mountain at the top. For us, our vision is to be the largest silicon carbon battery materials producer in the world, so bigger than any of the Chinese major players, bigger than anyone else; and not being big just for the sake of being big. Because we believe by going mass scale with our technology, we can have maximum impact on increasing the adoption of electric vehicles, because it has real impact on reducing the upfront cost of, say, an electric vehicle or how far you can drive your EV, which is two major factors holding people back. So, too, this charge rate is something that a lot of people are concerned about. So we can have that level of impact only through being massive scale. And we believe our technology is fundamentally geared for us to be at mass scale. So that's our mission, that's success for us, is to be manufacturing at hundreds of gigawatt hour capacity on a materials level. And we definitely have a clear path on how we can get there.

Elena Lambros:

It's a pretty exciting time to be at Sicona, then?

Christiaan Jordaan:

Yeah, it is. There's a lot happening. There's a lot happening, for sure. It's not a done deal, by any stretch of the imagination. In building a deep tech company like this, it's multiple valleys of death. It's not just one. We've gone through the first valley of death and it's like, yes, we congratulated ourselves, but we're well and truly into the second valley now. And it's not an easy thing to do, but we have an amazing team, fundamentally a fantastic technology, but technology in its own right won't be successful. You need the team to build it. And that's what I'm proud of, is the team we've been fortunate enough to assemble, that are all committed to the vision and to the mission of our company, really smart people. It's just surround yourself with smarter people, is the key to success.

Elena Lambros:

I like to do as well. I think it's great advice.

Christiaan Jordaan:

Yes.

Elena Lambros:

And for you, what is the key to re-imagining this current system? What does changing the game look like to you?

Christiaan Jordaan:

Yeah, changing the game for the current system I would say is for us to electrify everything, just electrify whatever is possible to be electrified, which is a lot, and transportation across the board. And whatever else can't be electrified, we need to look at other smart ways to transition from the old fossil fuels, consumption-driven, extractive industries-driven focus of just taking, taking, taking out of the earth without any consideration on the impact that has on our climate, on our own health, on air quality, those type of things. We need to really think in everything we do, how we do it matters, and transition to fundamentally just electrifying everything, which we are playing a part in. We're a cog in that wheel. And that's exciting to be a part of this second major industrial revolution, if you will. And for the good and with a mission to actually ... We need to do this. It's fundamental to our survival as a species. If we don't, we've all got to get on Elon Musk's rocket and go to Mars, which I don't want to do.

Elena Lambros:

Thank you. And then I always like to think about a person as an individual. What is your own personal commitment to net-zero in the next 12 months?
Christiaan Jordaan:

Yeah, so I've taken the first steps by moving my transportation to electric. Both our family cars are electric, and we'll never go back. Unfortunately, I had to drive one or two rental cars in the U.S. recently, internal combustion vehicles. And electric vehicle technology is just a superior technology, it's just much better to drive, easier, nicer to drive. It's just so much better. I can't believe we're still driving internal combustion ... It's quiet, it's seamless technology, instant acceleration. It doesn't feel like the car's going to fall over any moment, which is what I ... I feel very unstable in a normal car, which I was driving all my life until now. But anyway, it's a superior technology.

I'm proud to have taken those steps, but then for me, something I need to do now that I've very recently purchased a property for the first time in my life, which was one of the major missions to achieve, box to tick, the next step for me is to put solar panels on the roof as much as I can fit on, and then to put a battery to back it up. That's my personal commitment over the next 12 months.

Elena Lambros:

Excellent. Sounds like a good commitment. And finally, if you could provide listeners with one action to take away, what would that be?

Christiaan Jordaan:

Yeah, that's a tough one, aside from buying an electric vehicle, which I think everyone that can, should. If you can afford one, buy one. If you can't afford one just yet, hold on. Sicona is doing everything it can to reduce the upfront cost of EVs, which we can fundamentally impact. So hang in there. Aside from that, I would say anyone who's able to consider either leaving their current jobs or starting a new company or scaling a technology, anything that has a climate bent or impact, should be just doing that. If you've been thinking about it, don't think about it, just do it. Get out there. Either start a company in this space or go work for a company in this space, but just put your skills and your capabilities to good use. And think seriously about not just doing a work for the sake of getting some money every month, but just our impact on the planet and leaving it better than when we got it.

Elena Lambros:

No, I love that. I think I'll finish with that, leaving the planet better than what we got it, and thinking about our impact. I think that's incredibly important at the moment. And yeah, it's been great having you on here. Really inspiring just to see how much change has been made in such an essential industry for the energy transition in such a short time. So thank you so much for joining us today.

Christiaan Jordaan:

No, thank you. Thanks for having me on. It was great.

Elena Lambros:

Thank you for listening. I hope you found this episode both worthwhile and insightful. To learn more about our podcasts, visit sshurst.com/podcasts. Game Changers and Transition Makers miniseries follows on from our 30 for Net Zero 30 series, and I would encourage you to click on the link in the show notes to find out more. To ensure you don't miss any future episodes, subscribe now via Apple Podcasts, Spotify, or where you listen to your podcasts. And while you're there, please feel free to leave a rating or a review. In the meantime, thanks again for listening, and goodbye for now.