Global electric car revolution fuels WA lithium boom

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Updated

July 29, 2017 14:00:04

Electric cars are driving rapid mining investment in WA, with the state supplying most of the lithium needed to manufacture batteries worldwide.

Car makers’ EV targets

By 2019:
Volvo to phase out internal combustion cars
By 2020:
Volvo plans to develop an affordable EV
Tesla pledges to build 1 million EVs
Nissan predicts EVs will account for 20pc of sales in Europe
Ford forecasts up to 20pc of Chinese market will be EVs
By 2025:
Volkswagon to target 1 million EV sales
Mercedes predicts up to 25pc of its global sales will be EVs

Most electric vehicles (EVs) use lithium-ion batteries, the same technology which powers smartphones, tablets and laptops.

As car makers around the globe race to meet new EV targets, demand for batteries has driven lithium exports from WA as the state now produces more than half of the world’s supply.

Global leaders have been behind the push, with new European emissions legislation forcing car markers to increase their targets and France recently announcing it wanted to end the sale of petrol and diesel cars by 2040.

It joins similar targets set by India (2030) and Norway (2025).

The British Government is also set to ban the sale of petrol and diesel cars from 2040 as part of a plan to clean up air pollution.

Growth in demand ‘surprised most analysts’

Batteries to store household solar power, which would allow consumers to disconnect from the electricity grid, are also driving demand to a lesser extent.

“The speed at which demand has grown for lithium carbonate equivalent has surprised most analysts, ourselves included,” Katana Asset Management’s Romano Sala Tenna said.

“Up until a few months ago the conventional thinking was by about 2025, we would need about 330,000 tonnes per annum of lithium carbonate, [but] based on recent announcements from larger automobile manufacturers, we are now thinking we will need at least double that — about 600,000 tonnes per annum.”

While that may sound small compared to the 800 million tonnes the state’s iron ore industry exports each year, the activity in the sector is already creating thousands of new jobs and generating millions in royalties for the cash-strapped WA Government.

The Greenbushes mine in the state’s South West, which is part owned by China’s Tianqi Lithium and America’s Albemarle, is one of the world’s largest lithium producers and is undergoing an expansion to double production.

The mine has seen both boom and bust since starting out as a tin operation in 1888, but is now on the cusp of another upswing — laying claim to what was considered the world’s highest grade lithium deposit.

“It is the longest continuously running mine in Western Australia and it’s on its third product. It just seems to keep producing new life,” Tianqi Lithium general manager Phil Thick said.

“Lithium is obviously a game changer for that mine. It’s been significant as a tin and tantalum mine, but lithium value is substantial.”

The joint venture is also building what it claims to be the biggest lithium processing plant in the world in Kwinana south of Perth.

The project will cost $400 million and create 500 construction jobs.

‘More than just a mini-boom’

Growth in the sector has been rapid.

In January, the state had just one mine producing lithium — it now has four and exports have jumped six-fold.

Business observer Tim Treadgold has witnessed big changes in WA’s mining landscape during his 40 years commentating on the sector.

“This is more than just a mini-boom, this is the real McCoy, we could go from one [mine] two years ago to eight by this time next year. It really has been quite remarkable what’s going on,” he said.

Activity in the sector is attracting big names including Chilean major Sociedad Química y Minera de Chile (SQM) which has inked a deal to bankroll a new deposit in the Goldfields with Kidman Resources.

It includes plans to build a $100 million refinery at either Bunbury, Perth or Kalgoorlie.

The deal was announced just days after Kidman won a Supreme Court battle against another miner to maintain control of the mine.

“The world has beaten a path to our door. The arrival of SQM was a real wakeup call that the world wants it and it’s coming here and it’s prepared to pay for it,” Mr Treadgold said.

‘We can’t afford to keep throwing these things away’

Demand is also growing for other specialty minerals which go into building a battery, including graphite, cobalt, vanadium and nickel.

While the focus for most miners has been getting their lithium to market as quickly as possible, other players like Lithium Australia is targeting lower grade lithium and recycling of old batteries.

“Our focus has been developing processing technology to a large extent focusing on the materials people don’t want to process at the moment,” Lithium Australia managing director Adrian Griffin said.

“If you look at the industry, there’s more lithium that gets discharged to waste around the world than ever gets into the process supply chain.

“One of the things Australia really needs to look at is the recycling of waste battery materials.

“We can’t afford to keep throwing these things away: At the moment there’s about 8,000 tonnes a year of battery materials going to landfill and there’s only about 800 tonnes recycled.”

Topics:

mining-industry,

environment,

road-transport,

alternative-energy,

wa

First posted

July 29, 2017 12:51:20



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