Li-S Energy Advances with $7.8M ARENA Grant and New Defence Deals

Strategic Funding Boost and Manufacturing Scale-Up

Li-S Energy Limited (ASX – LIS) has reported a productive December quarter, marked by a $7.8 million grant from the Australian Renewable Energy Agency (ARENA). This funding underpins the feasibility and front-end engineering design for their Phase 4 manufacturing plant, aiming for a substantial scale-up to 1 GWh annual lithium-sulfur battery production. This represents a transformative leap from their current pilot operations, positioning Li-S Energy at the forefront of Australia’s sovereign battery manufacturing capabilities.

The grant aligns with national priorities to enhance renewable energy technologies and domestic supply chains, reflecting government confidence in Li-S Energy’s technology and commercial potential. The visit by Federal Minister Chris Bowen to the Geelong facility further underscores the strategic importance of the company’s advancements within Australia’s clean energy transition.

Forging Defence and Commercial Partnerships

Li-S Energy has strengthened its commercial footprint through collaborations with notable defence and technology firms. The partnership with UK-based MSubs focuses on testing lithium-sulfur cells for large unmanned underwater vehicles (UUVs), including pressure testing to depths of 1000 metres. This initiative targets high-value defence applications, leveraging the batteries’ high energy density and safety advantages for multi-day missions.

Simultaneously, Li-S Energy entered a collaboration agreement with South Australia’s Praetorian Aeronautics, which is scaling production of its Dagger counter-drone interceptor UAVs. Praetorian’s evaluation of Li-S batteries for these drones, with potential production of up to 10,000 units annually, represents a significant commercial opportunity contingent on successful integration and testing.

Pioneering Lithium Foil Production and Power Cell Development

Operationally, Li-S Energy commissioned Australia’s first lithium foil production line at its Geelong facility, producing ultra-thin lithium foils critical for lithium-sulfur and lithium-metal batteries. This milestone not only secures a sovereign supply chain for Li-S Energy’s internal manufacturing but also opens avenues for export markets.

Additionally, the company announced progress on a new lithium-sulfur Power Cell designed for high-power applications such as multi-rotor drones and wearable technologies. This development could broaden Li-S Energy’s addressable market by catering to applications requiring rapid discharge and high responsiveness.

Financial Health and Corporate Updates

Li-S Energy’s financial position remains robust, bolstered by a $3 million R&D tax refund and positive operating cash inflows of $970,000 for the quarter. The company ended the period with $14.4 million in cash and equivalents, providing a solid runway for ongoing development and scale-up activities.

On the governance front, Dr Lee Finniear was appointed Managing Director, consolidating leadership continuity as the company advances its strategic objectives. The retirement of Non-Executive Director Ms Hedy Cray was also noted, marking a transition in board composition.

Global Market Engagement

Li-S Energy maintained high visibility at key international defence events, including the Association of the United States Army (AUSA) exposition in Washington DC and Indo Pacific 2025 in Sydney. These platforms have been instrumental in expanding the company’s partner and customer pipeline within critical defence and commercial sectors.