Li-S Energy (ASX: LIS) has secured a $7.8 million grant from the Australian Renewable Energy Agency (ARENA) to accelerate planning for a large-scale lithium-sulfur battery manufacturing facility.
The funding will support manufacturing optimisation, a detailed feasibility study, and front-end engineering design (FEED) for a staged development targeting up to 1 gigwatt-hour per year of cell production.
Li-S Energy said the grant represents a major endorsement of its technology platform and a significant step toward establishing sovereign advanced battery manufacturing capability.
ARENA Grant to Drive Planning
The Advancing Renewables Program grant will enable Li-S Energy to refine cathode and anode production, optimise stacking and recycling processes, and upgrade key manufacturing equipment.
Alongside this optimisation program, the company will complete a feasibility study assessing a staged expansion path from its existing 2 megawatt-hour automated Geelong line to a potential 1GWh facility.
A FEED package will then generate tender-ready specifications and costings, creating a fully “investment ready” foundation for future construction and financing.
Li-S Energy’s 2MWh Phase 3 production line in Geelong provides the operational foundation for the scale-up task, having already supported development of 10 ampere-hour cells and partner validation programs.
The company highlighted that lithium-sulfur cells contain no nickel, cobalt or graphite, reducing exposure to global supply-chain constraints and strengthening Australia’s advanced-battery capability.
Commercial-Scale Production
Chief executive officer Dr Lee Finniear said the grant would “accelerate the critical commercial and engineering studies needed to progress advanced lithium-sulfur batteries toward large-scale production.”
He added that it will support demand growth across drones, defence, aerospace, and other high-value markets.
Chair Ben Spincer said a well-developed pathway to scale, backed by the Federal Government, “substantially enhances our credibility to engage early and effectively with large customers, strategic partners and financial institutions.”
Li-S Energy believes the staged approach ensures capital efficiency while enabling the company to align manufacturing capacity with future offtake agreements.
Strengthening Market Readiness
Li-S Energy’s proprietary chemistry has achieved energy densities of 456 watt-hours per kilogram, and its recently commissioned lithium foil and laminate production capability further enhances domestic supply resilience and supports the company’s diversification into precursor-material revenues.
The company has continued to supply test cells and build battery packs for partners including VTOL Aerospace, Kea Aerospace, and Praetorian Aeronautics, with additional defence programs under way.
Stage 1 of the ARENA-funded program will commence immediately, covering optimisation and feasibility work over a 12-month period.
Subject to positive outcomes, Stage 2 will deliver a full FEED package to prepare the project for construction, site selection and financing engagement.
Li-S Energy said binding or conditional offtake agreements are expected to underpin any final investment decision on its proposed large-scale facility.
