Crunch time comes for battery maker Magnis Energy as production deadline nears

After years of delay and controversy, Magnis Energy says it expects to produce its first batteries by the end of this month.

Magnis Energy Technologies chairman Frank Poullas. Picture: Britta Campion

Crunch time has come at Magnis Energy Technologies. After years of delay and controversy, the one-time market darling says it expects to produce its first batteries by the end of this month.

It will have been a long time coming for some Magnis shareholders, who have been told repeatedly by the company and its chairman, Frank Poullas, that production is imminent.

“We will be producing lithium-ion battery cells … in a place called Endicott, literally starting commercial production within weeks,” Mr Poullas said in one interview, with the SNN Network, in November last year.

“We’re literally about to start commercial production … out of our battery plant. (We are) a near-term revenue company, from a Magnis point of view, in one of the exciting industries there is out there right now,” he added. “It’s really exciting for us to start this commercial production that will start by the end of this year.”

Magnis has a unique pitch: it owns a graphite mine operation in Tanzania, it has a stake in a company that owns the intellectual property used in its EV batteries, and it has a controlling share in the manufacturer in New York.

Its manufacturing subsidiary, Imperium3, expects annual revenues of $1.8bn by 2027, Magnis told the ASX in October last year.

And that made the company a hot commodity. Its market value rose more than 60 per cent in the six months to December 31. But disquiet about its operations has pushed down the share price. It has fallen 30 per cent in the past six months to close at 30c.

Last month Magnis told the ASX the New York plant was 72 per cent complete at the end of April – the plant was “on schedule to begin production late next month”. “The completion rate is expected to be in the vicinity of 80 per cent when fully automated production begins … 20 per cent includes some cosmetic changes to the factory, minor works to an internal office area and the ramp up of production.”

That time frame is at the end of Mr Poullas’s estimate. In ­January he said: “We’re literally talking about within six months there will be revenues coming through for (the New York factory).”

He told the ASX Investor channel: “Towards the later end of first half this calendar year we should be getting into that fully automated production.”

The plant, run by Imperium 3 New York, already produced hundreds of cells, the company said, noting some were being used “for qualification and certification purposes”.

Mr Poullas, when contacted on Monday, thanked The Australian for its questions but did not respond to them.

The Endicott plant was announced in 2017 by New York governor Andrew Cuomo and was to open by the end of 2019. It was expected to produce 15 gigawatts of lithium-ion batteries. In May last year, after announcing Imperium 3 had signed orders worth at least $US665m ($953m), Magnis disclosed the plant’s production capacity was being “increased” to just 1.8GW a year. Mr Poullas previously had told The Australian the plant was likely to be operating “at decent scale” by April 2022.

Magnis has been queried repeatedly by the ASX, including in October when the company had to respond to questions about the size of contracts signed with Sukh Energy, one client. Financial reports showed Sukh had few assets and little revenue. That is despite Magnis claiming Sukh had signed a deal projected to provide $US243m by 2026.

Magnis had to withdraw claims it had a potential value of $10bn, built on the back of the Imperium 3 business.

Former Worley development and growth vice-president David Taylor starts as the company’s chief executive in August.