Mining firms have unveiled a blueprint they say could transform Australia into a global battery development hub— and grab a multi-billion-dollar slice of the “lithium value chain”.
A new report from Australia’s Association of Mining and Exploration Companies (AMEC) calls on the federal government to declare battery minerals processing an “industry priority”— and use tax breaks and other incentives to entice global industry giants to the country to kick-start a domestic battery industry.
“With government engagement and leadership, Australia could take the lead in the development and delivery of lithium-ion batteries,” the report said.
Previous studies conducted for AMEC “identified that the currently AUD165 billion ($124bn) global lithium value chain will grow to a conservatively estimated AUD2 trillion by 2025”.
Australia could capture an estimated AUD10bn of the total value in the next eight years without government and industry cooperation, the report said. “However, if one more step was taken down the value chain into electro-chemical processing, by 2025 Australia would have a share of a further AUD297bn.”
Nearly 90% of global electro-chemical processing, “the next major step down the value chain from mining and concentrating, occurs in China”, the report said. But despite “commonly held views— Australia can compete on cost and quality grounds”.
Attracting an international battery producer to minerals-rich Western Australia would “cement Australia’s position in the battery supply chain”, according to the report.
“The technology and intellectual property to successfully process high grade lithium hydroxide, and undertake further battery cathode development, is closely held by a small number of companies globally,” the report said.
“The companies that have this knowledge and experience are based primarily in Japan, South Korea, China, the EU and the USA. These companies not only hold the expertise but are the well-established suppliers into the global market with secure contracts to vehicle and phone manufacturers.”
According to AMEC, Western Australia already mines more than 60% of the world’s supply of lithium “and produces all of the other minerals necessary to domestically manufacture batteries”.
Spodumene mined in Western Australia “has a lower conversion cost to lithium hydroxide when compared to the brine evaporated in other jurisdictions”, AMEC’s report added. “This comparative advantage is reinforced by tariff advantages when compared with China, making Australia cost competitive in a technology and industry that is not heavily reliant on low labour costs.”
AMEC is now urging Western Australia’s state government to put a minister in charge of leading a “strategic focus on battery minerals extraction and processing”— and to publish a battery development plan.
Federal and state ministerial-level trade missions should be sent to countries such as China, South Korea and Japan “to attract investment in Australia”, AMEC said. “Currently, mining and mineral exploration companies are undertaking these discussions alone and in an ad hoc fashion. If Australia’s opportunity is to be realised, the weight of coordinated ministerial and government strategic engagement is needed.”
BBB reported earlier this month that an Australian-Chilean joint venture company planned to develop a lithium refining plant in Western Australia.
