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The Battery Boom Has a China Problem | John Passalacqua - First Phosphate

The Deep Dive Jul 17, 2026

Summary

LFP (lithium iron phosphate) batteries need a purer phosphate than fertilizer, and igneous rock sidesteps the fertilizer chain Hormuz disruptions are squeezing.

Phosphate makes up roughly 60% of an LFP cathode by weight against just 4% lithium, and LFP is about 75% of batteries produced.

The small-cap selloff tracks macro — oil, inflation, rates — so the guest urges investors to check each company's cash and re-raise needs.

First Phosphate closed a $17.7 million raise, holds about $35 million, and adds a non-dilutive $16.7 million federal contribution.

Feasibility study targeted for late 2026 or early 2027, production by 2029, and G7 partners lining up behind both Quebec projects.

Steve Hyland's takeaways

  • Top takeaway He frames the phosphate sell-off as a sector move rather than a company problem, opening on the recent US import duty cut on the mineral and asking the guest to explain the value difference between the fertilizer and LFP routes.
  • He presses the company on its falling share price, telling viewers a lot of juniors are hurting, then probes what the raise and roughly $50 million of capital will fund over the next couple of years and why the company now draws far more institutional interest than when it was just another name on the CSE.

John Passalacqua's takeaways

  • Top takeaway His central argument is that the small and mid cap sell-off is a capital-availability story rather than a company story: a restarting Iran-US conflict pushes oil and inflation up, keeps interest rates high, shrinks available capital, and small caps are sold first - so investors should sort holdings by who already holds cash, and he expects funded names like his to be where sidelined cash returns.
  • He argues igneous phosphate is structurally better suited to batteries than to fertilizer, since LFP-grade material needs one more purification step into purified phosphoric acid and igneous rock converts almost entirely into that acid without entering the fertilizer stream, which he describes as sheltering the company from sulfur and sulfuric acid cost pressure.
  • He cites the composition of an LFP cathode - roughly 60% high-purity phosphate against about 4% lithium - and states that LFP is around 75% of all batteries produced worldwide, using that to argue phosphate demand is tightening on both the agricultural and battery storage sides.
  • He is pushing an aggressive timeline out of necessity: feasibility study by early 2027 and production by 2029, funded through to the final investment decision, with the aim of moving into mostly non-dilutive capital for mine construction; he adds that the investor base grew roughly tenfold from about 5,000 holders on the latest Broadridge list, with more small funds and family offices entering even as retail was retained.
  • He states that almost the entire board and all senior management are shareholders, that the board and his own CEO compensation is 100% in stock or RSUs, that he owns about 10% of the shares, and that management takes 50% of pay in equity, with minimizing dilution as the stated objective.