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Lithium to supercharge local manufacturing

October 15, 2021

With international prices soaring for many of Australia’s mineral exports, now is the time to
refine and transform more of them here, cashing in on the boom and creating scores of
manufacturing jobs.

Aluminium, copper, uranium and nickel prices are at respective 13, 10, seven and seven-year highs.

But it’s lithium – the lightweight metal used to make batteries for our phones, laptops and,
increasingly, our cars – that could offer us our best chance to supercharge local manufacturing
in a post-carbon world.

Pilbara Minerals recently secured an offer of $US2240 per tonne for a parcel of lithium-rich
spodumene concentrate, up from $US400/tonne last year, and $US900/tonne last month.

And the spot price for lithium carbonate — the refined product used to make modern batteries
— has gone from about $US35,000 a tonne this time last year to about $US170,000/t this
September.

Australia is the world’s top exporter of lithium minerals, accounting for 60 percent of the world’s
production, despite only having 19 percent of the world’s reserves.
Yet in 2019, all of Australia’s spodumene – our main lithium ore – was refined in China, which
accounts for 83 per cent of the world’s battery cell production.

AWU National Secretary Dan Walton says Australia has missed opportunities to enter large-
scale renewable energy manufacturing, after losing most of our solar panel capability to offshore
manufacturers, but refining lithium and making batteries here could get us back in the game.

“The world’s ‘battery moment’ is taking place right now as options for dispatchable power are
being investigated for power generation and for electric vehicles,” Dan says.

“BHP says the demand for nickel-based batteries is expected to grow by 500 per cent over the
next decade. It has just done a deal with Tesla to provide it with the key mineral used in its EV
and battery storage systems.

“And batteries will play a crucial role in supporting the stability of the grid (alongside gas) as
more variable forms of electricity generation become the dominant power source.

“Now is the perfect time for Australia to put some serious effort into establishing a battery supply
chain in Australia, rather than continuing to rely on countries like China to simply refine our
minerals.”

But Australia has a long way to go if it wants to join the lithium-battery rush.

A CSIRO report found there was no commercial production of battery precursor chemicals in
Australia with only one company, BHP’s Nickel West, in the construction phase to make battery-
grade nickel sulphate at its Kwinana refinery.

An Austrade study found just 0.53%, or $1.13 billion of value, in global battery manufacturing is
now done in Australia.

But while there are a number of pilot projects in Australia for the assembly of batteries, or for
large public battery arrays, there is a lack of coordination between project proprietors.

“The opportunity for battery manufacturing has implications for domestic energy storage as well
as the world export market,” Dan says.

“Australia end up producing billions of dollars worth of lithium batteries, even for markets such as China.

“This could become a reality, but only if our politicians step up, take some responsibility, and plan.”

The AWU believes the Government’s Modern Manufacturing Initiative is a good first step, and a number of projects under the plan could make an important contribution to Australia’s sovereign capability and have significant export potential.

And just as the Government has developed a national hydrogen strategy that it says will set a
“vision for a clean, innovative, safe and competitive hydrogen industry that benefits all Australians”, we need a national battery strategy to coordinate the multiple strands of energy and industry policy, and complement the existing work of state and territory governments.

This would provide a central template for how battery manufacturing capacity can be developed for domestic and export markets alongside the introduction of central battery storage to the
Australian electricity grid.

One big problem is our meagre knowledge base, with the Future Battery Industries Cooperative
Research Centre warning there are no courses to equip people to work in the battery industry, either in cell manufacturing or battery-specific electrical skills.

Dan says it’s important that everyday Australians have a chance to share in this exciting new
industry.

“Australia must start investing in more in R&D and innovation, and most importantly, in its people,” he says “We should be training the next generation, and also ensuring that blue-collar jobs have
a place in the realm of renewables manufacturing.

“Governments should investigate the role of TAFE in delivering courses specific to cell and
precursor manufacturing.

“They must also consider apprenticeship and traineeship-level pathways to ensure that the
labour market in battery and cell manufacturing has enough employees and is not skill starved.”

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