Material Insights · Understanding the Material World

Lithium iron phosphate batteries and Phosphate rock

Every LFP cathode needs purified phosphoric acid made from phosphate rock, so the rise of LFP has created a new, high-purity demand that competes with fertiliser for the best rock. The volumes are still small against fertiliser, but they are concentrated in China, which also mines most phosphate.

Lithium iron phosphate batteries (energy) and Phosphate rock (commodity): 4 relationships.

How they are linked

1. Precursor: purified phosphoric acid

Physical flow · Strong · Phosphate rock to phosphoric acid to iron phosphate to LFP

The phosphate in an LFP cathode comes from phosphoric acid made from mined rock and purified to remove iron, fluorine and other impurities that would harm the cell.

  • 0.61 Mt phosphoric acid used for LFP worldwide, 2025
  • about 1.3 kg phosphoric acid per kWh of LFP, implied by the 2045 projection (2.93 Mt for 2.3 TWh)
  • over 55% LFP share of EV batteries deployed, 2025

Over 80% of phosphoric acid is fertiliser grade, made by the cheap wet process, and battery use needs an extra purification step. No accepted definition of battery-grade phosphate precursors exists, so specifications vary by cell maker. In the authors' projection, acid demand for LFP rises from 0.61 Mt in 2025 to about 2.9 Mt by 2045 as LFP spreads in EVs and grid storage.

Sources: Royal Society of Chemistry, EES Batteries; IEA

2. Competes with fertiliser

Cost and price · Rising · LFP and fertiliser draw on the same rock

Fertiliser takes most phosphate rock, and battery makers need the higher grades, so growth in LFP tightens the market for clean rock and acid and can lift costs for fertiliser makers.

  • 4 to 23% of current phosphate ore demand for fertiliser needed to meet projected 2045 LFP acid demand
  • 15 to 77% the same demand against today's higher-purity acid output, including food and technical grades
  • about 55% fertiliser share of China's phosphate ore demand, down from over 60% (SMM, 2025)

The wide range reflects uncertainty about how fast LFP grows and which acid route it uses. In China, the fall in fertiliser's share of ore demand shows new energy uses already competing. China's restrictions on phosphate exports also keep world fertiliser markets tight, which matters for import-dependent countries.

Sources: Royal Society of Chemistry, EES Batteries; Shanghai Metals Market (SMM); CRU, Sulphur magazine (BCInsight)

3. China and Morocco

Geography and ownership · Strong · Rock and LFP both centre on China

China mines the most phosphate rock and makes most LFP cells, so it can supply its battery industry from domestic rock, while Morocco holds most world reserves.

  • 110 of 250 Mt China's phosphate rock output, 2025 estimate
  • about 68% Morocco's share of world reserves

Battery makers outside China seeking phosphate supply look to Morocco and other exporters, which may build purified acid capacity to serve them. Phosphate rock is cheap, about USD 100 a tonne at US mines in 2025, so the value lies in purification, not in the rock. India, by contrast, produced about 1.5 Mt in 2025 and relied on imports for about 90% of its rock phosphate, according to the government in 2021.

Sources: USGS; Press Information Bureau, Ministry of Chemicals and Fertilizers

4. Price link: battery demand

Cost and price · Weak · Both ways

LFP is a small but fast-growing call on phosphate rock, and the battery proxy is a US battery price index, so the monthly link is almost nil.

  • 0.06 monthly change correlation
  • 0.30 12-month change correlation
  • 1.37 fitted elasticity

Rock prices are set by fertiliser demand, and phosphate is a small part of an LFP cell's cost, so neither price drives the other month to month. The yearly correlation reflects shared commodity cycles more than a cost link.

Sources: Material Insights (World Bank, FRED, IMF data)

For investors

Key learnings

  1. Value in the LFP phosphate chain sits in purification, not in the rock, which sold for about USD 100 a tonne at US mines in 2025.
  2. Projected LFP acid demand by 2045 could equal 4 to 23% of today's phosphate ore demand for fertiliser, and 15 to 77% of today's higher-purity acid output, enough to tighten high-grade supply.
  3. China combines phosphate mining with most LFP production, so non-Chinese cathode makers will look to Morocco and other exporters.

What to track

  • Purified phosphoric acid and iron phosphate capacity: New capacity outside China signals a diversifying LFP chain (As announced · company filings)
  • Phosphate rock and DAP prices: Rising prices show tightening between fertiliser and battery demand (Monthly · World Bank Pink Sheet)
  • LFP share of battery deployments: A rising share raises phosphate acid demand (Annual · IEA Global EV Outlook)

For policymakers

Key learnings

  1. Battery and fertiliser needs for phosphate overlap, so mineral strategies should plan for both uses of the same rock.
  2. India relied on imports for about 90% of its rock phosphate (2021 government figure), so a domestic LFP industry would add to an existing import exposure.
  3. Purified acid, not rock, is the bottleneck for LFP, which makes acid purification capacity a target for industrial policy.

What to track

  • Rock phosphate and phosphoric acid import volumes: Rising imports for battery use add to fertiliser import dependence (Monthly · Department of Fertilizers; trade data)
  • China phosphate export policy: Tighter rules raise prices for importing countries (As announced · China customs and NDRC)

India

India produced about 1.5 Mt of phosphate rock in 2025 and imports about 90% of the rock it uses (2021 government figure), so LFP cathode plants in India would compete with fertiliser makers for imported phosphate.

Sources

  1. Opportunities and challenges for the expansion of LFP battery supply chains (Wikoff et al.), Royal Society of Chemistry, EES Batteries (2026)
  2. Global EV Outlook 2026: electric vehicle batteries, IEA (2026)
  3. Phosphate ore capacity expands due to new energy demand, but tight balance in supply and demand may persist, Shanghai Metals Market (SMM) (2025)
  4. Mineral Commodity Summaries 2026: Phosphate rock, USGS (2026)
  5. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data) (2026)
  6. Action plan to make India self-reliant in fertiliser production, Press Information Bureau, Ministry of Chemicals and Fertilizers (2021)
  7. Sulphur prices soaring, CRU, Sulphur magazine (BCInsight) (2025)