Phostech Lithium Inc.

Phostech Lithium Inc.

March 28, 2007 07:00 ET

Sud-Chemie to Invest CAN$ 35 Million in 2007 and 2008 in Quebec in Lithium Iron Phosphate Production for Use in New Generation of Powerful and Safe Lithium-Ion Batteries

SAINT-BRUNO-DE-MONTARVILLE, QUEBEC--(CCNMatthews - March 28, 2007) - Phostech Lithium Inc., Boucherville/Canada, an affiliate of Sud-Chemie AG, Munich, has completed the construction of a production line of 300 metric tons per year of Lithium Iron Phosphate (LiFePO4). The capacity will reach 900 metric tons per year after the present extension of that production line. The investment amounts to CAN$ 6 million. The plant is situated in St. Bruno. In 2007 and 2008, Phostech Lithium will invest in further capacity of a new production line with investments of more than CAN$ 35 million in the Montreal area. This additional capacity will reach 1.500 metric tons per year.

LiFePO4, discovered in 1995 by the University of Texas and licensed to and then developed by Hydro-Quebec from 1997 to 2001, is used in lithium-ion batteries. Phostech Lithium has been granted an exclusive license from University of Texas and Hydro-Quebec for the production and sale of LiFePO4 for lithium-ion batteries. LiFePO4 replaces Lithium Cobalt Oxide and allows larger, safer and more environmentally-benign batteries in portable electronics such as laptop computers and cell phones. Favored markets are power tools, electric bicycles and scooters as well as electric and hybrid cars. For example, electric bicycles and wheelchairs with lithium-ion batteries sold in South East Asia, Europe and in the US contain Phostech Lithium's product.

Sud-Chemie AG, an independent company active in the field of Specialty Chemistry, is the major shareholder since 2005 of Phostech Lithium, founded in 2001 by a group of Quebec scientists. Beside the scientists, Societe Generale de Financement (SGF) is the third shareholder.

Phostech Lithium has been granted an exclusive license from University of Texas and Hydro-Quebec for the production and sale of LiFePO4 for lithium-ion batteries. With the financial support and industrial expertise of Sud-Chemie, Phostech Lithium has now all the needed resources for an accelerated growth in the coming years.

Munich/Montreal, 9 February 2007

Sud-Chemie AG (www.sud-chemie.com) is a publicly quoted, independent specialty chemical company headquartered in Munich/Germany and operating on a worldwide scale. Key markets served by its Adsorbents Division include the consumer-goods, packaging and foundry industries, as well as the paper and plastics industries. Products manufactured by the Catalysts Division offer solutions for water treatment, petrochemicals processing, energy storage and hydrogen production, as well as off-gas purification. The common denominator of all its products and innovations is the efficient and sparing use of natural resources to enhance the quality of life for humans and the environment. The Sud-Chemie Group generated sales of _933 million in 2005, almost 80% of these outside Germany. Sud-Chemie Group had around 5,000 employees at 65 sales and production sites worldwide in mid 2006. In 2007 Sud-Chemie celebrates its 150th anniversary.

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