Submission to the Department of Industry, Science and Resources
The Critical Minerals Association Australia (CMAA) would like to thank its members for contributing to the National Battery Strategy Consultation.
Read the issues paper here.
Batteries will power electric vehicles (EVs), residential and community scale energy storage, and grid energy storage for small and large systems. Australia can capture increasing parts of these growing markets, building on our strengths in mining and range of battery minerals.
Australia can offer mineral and manufacturing inputs into a wide range of battery chemistries across the value chain. Lithium-ion, sodium-ion, vanadium flow batteries and others, present opportunities for Australia and can support the transition to a net zero emissions economy. Australia will need to have access to diverse types of batteries as demand for batteries for a variety of uses grows. The Australian Government has announced that it will put in place the building blocks to support battery industries in Australia by:
releasing a National Battery Strategy, which will outline actions for governments and industry to help build scale and competitiveness
establishing a Battery Manufacturing Precinct to boost domestic manufacturing
establishing a Powering Australia Industry Growth Centre to convert Australia’s competitive advantages in renewables into local jobs and investment.
The National Battery Strategy will complement other government priorities such as the AUD$15 billion National Reconstruction Fund (NRF), Powering Australia plan (including the National Electric Vehicle Strategy and Australia’s emissions reduction target), Rewiring the Nation, A Future Made in Australia, and the Critical Minerals Strategy.
Read CMAA's Submission below:
Australia is the largest producer of lithium (accounting for 52% of global production in 20211) and a significant producer of other battery minerals. In a global race to secure the critical minerals necessary for electric vehicle battery manufacture, Australian producers are inking offtake agreements with leading global automakers (Liontown and Ford, Queensland Pacific Metals and General Motors, GME Resources and Stellantis, and more). Australia now has the opportunity to evolve beyond its “dig and ship” model to take advantage of the increase in critical mineral demand spurred by net zero agendas and electrification. A typical electric vehicle lithium-ion battery pack (LIB) requires around 10kg of lithium. LIB demand is expected to grow by around 33% annually to reach around 4,700 GWh by 20302. Benchmark Minerals Intelligence estimates that 74 new lithium mines of an average size of 45,000 tonnes will be needed by 2035, decreasing to 59 taking recycling of lithium into account.
Like many of its allies, including the US, EU, and the UK, Australia is now looking at capturing more value by creating Australian batteries made from Australian minerals. This ambition, however, skips a crucial step within the supply chain – the midstream processing and refining of high specification, high value battery materials. Despite Australia’s dominance in hard rock lithium production, China dominates over 60% of lithium refining, over 70% of cobalt refining, and almost the entire graphite supply chain.
Without domestic refining capability any future electric vehicle battery industry will remain reliant on opaque supply chains with sovereign dominance. This has the potential to undermine the environmental, social, and governance (ESG) credentials of minerals extracted in Australia, as well as the battery end-products if the processing and refining is irresponsible, including using toxic and fossil fuel-intensive processes. While any such batteries may be produced responsibly in Australia, their mine-to-battery lifecycle would not be. Western Australia has successfully attracted global companies such as China’s Tianqi Lithium, US’ Albemarle, and Chile’s SQM who have partnered with Australian companies to varying extents to set up refining plants in the state. There are also increasing partnerships between UK and Australian companies (e.g., Tees Valley Lithium and Recharge Industries) however Australia is still missing sovereign capability that adds and retains value within Australia, to ensure a secure supply of refined materials for Australia’s future battery industry.
The midstream is also crucial for the circular economy and the refining of recycled materials. Australia’s planned battery sector will require an efficient recycling sector to manage end-of-life products. According to CSIRO, lithium-ion battery waste is growing by 20% per year and could exceed 136,000 tonnes by 2036, only 10% of Australia's lithium- ion battery waste was recycled in 2021 and majority of Australia’s battery waste is shipped overseas.
Australia has the benefit of building these industries from scratch and hence the opportunity to embed responsible practices into regulations (i.e., defining what ‘waste’ is and responsibilities of disposal and recycled content) without creating unnecessary red tape. The government can create incentives such as tax credits to encourage responsible practices to be embedded during project planning stages. However, the government must keep in mind that any Australian start-ups are competing not only with non- Australian companies that are competitive on cost (due to advanced technologies and government subsidies) but also our Western and Asian allies where significant downstream investments in battery manufacturing have proceeded, in some cases, on the assumption that the raw materials will be available from reliable suppliers like Australia. The Inflation Reduction Act (IRA) in particular sets the US as an attractive destination for OEMs, and now the EU’s recently released Critical Raw Materials Act has created regulations to incentivise downstream activity.
The Queensland Government funded $75 million Common User Facility planned for Townsville is a model that highlights the potential and benefit of stronger collaboration between industry and government. The CUF will accelerate the testing, demonstration and engineering of viable processing pathways for a range of battery metals from the north west minerals province of Queensland, although initially aimed at supporting vanadium processing. This not only reduces the cost, time required and risk associated with mineral processing project development, it also creates opportunities for smaller processing operations to get first-hand experience in both materials handling of their ore needs and the economics of production using their chosen pathway. The significant reduction in technical risk that should flow from this facility will lead directly to more investment in regional mining and mid-stream processing projects with the associated employment and infrastructure benefits. The opportunity to conduct detailed investigations into processing options has great potential to unlock smaller mineral deposits.
There is potential to collocate battery start-ups with this type of common user facility which is plugged into cheap, renewable energy sources. Operation and maintenance of the facility, funded by project developers investing in early stage mineral processing studies, will itself create demand and employment in local engineering and metal good manufacturing firms. Process engineering and modelling, supply of reagents, chemicals and other consumables, would all benefit from this investment. In turn this is likely to stimulate a cluster of mineral processing expertise and know how in the local region.
Clusters also have the potential to attract global companies. However, the scale of the task at hand requires greater collaboration at Federal and State level. Currently, the States operate in silos, as do a number of Federal departments which appear to have overlapping coverage of critical minerals. Australia’s untapped potential to move further downstream requires collective strategic planning across both Federal departments and the States to ensure that all Australians benefit from the nation’s battery ambitions.
The complexities of geopolitics and battery supply chains are extensive and not exhaustively covered in this submission. The Critical Minerals Association Australia welcomes further government engagement on Australia’s National Battery Strategy.