As the global spread of electro-mobility and energy storage technology has picked up the pace, bottlenecks in the lithium-ion battery supply chains have become a hotly discussed topic. And while miners around globe are stepping up their production capacities to cater to the demand, investors across industries are seeking to lock in supply.
In all that commotion, a new report commissioned by the Association of Mining and Exploration Companies (AMEC) points out that Australia needs to further cement its leading position on the global lithium market by considering the opportunities down the supply chain.
The report underlines that to be a significant global player in all downstream elements, Australia must act with urgency and seize the opportunity.
“It is crucial that action is taken quickly so Australia takes a share of the thousands of new jobs (skilled and semi-skilled) in this two trillion-dollar value chain,“ reads the report published by Perth-based consultancy Future Smart Strategies titled A lithium industry in Australia: A value chain analysis for downstreaming Australia’s lithium resources.
“With projects at Greenbushes, Mt Cattlin, Mt Marion and Pilgangoora all ramping up production, Australia will dominate the front of the lithium value chain for the foreseeable future,“ says Warren Pearce, CEO of AMEC. However, it is its presence in the in downstream lithium processing that has to be improved.
Noting that last year Australia captured 60% share of the world’s lithium market, the report says that Australia already has the advantage of rocky deposits of lithium, whereas in other parts of the world most major reserves are found in salt lakes and extracted by natural evaporation, and can therefore rapidly and cost-effectively expand production.
However, lithium refining and further processing typically takes place offshore following Australia’s shipment of product with only 6% lithium content.
Therefore, the report underlines that processing concentrate further into battery grade products closer to the mine would bring significant costs savings in transport and logistics, while capturing high returns and creating jobs.
“We have a window of roughly two years before it is set where battery components and batteries will be manufactured and by whom,” says Warren Pearce, CEO of AMEC. “If we work collaboratively Australia could take a leading role in one of the breakthrough energy technologies. The time to act is now.”
Under a “business as usual“ scenario, Australia will continue to gain significantly from the lithium mining, but also risk seeing a decline in its share of the total market value.
Moreover, the report says that Australia is also in danger of experiencing a negative balance of trade impact due to its need to reimport value-added products (such as the batteries themselves), as well as missing opportunities in R&D, high-tech manufacturing, and cross-sector synergies (such as energy trading, high-tech recycling, grid stabilization).
“There is a limited window with many other countries already aggressively moving to take capitalize on these opportunities,“ underlines the report, adding that the countries that have done the most to date to position themselves down the lithium value chain have created policy settings, regulations, industry support and consumer demand drivers, as in the case of China, Korea and Japan.
“Government, industry and industry associations must collaborate to capture the opportunity,“ concludes the report.