lithium - Australia Aims to Become World-leading Lithium Battery Player

Australia has released a strategy for seeking investment to develop a competitive lithium-ion battery industry by making the best of its minerals wealth, the government said in a report on December 11, underscoring that Australia is well-positioned to become a world leader in this thriving market.

The government report pointed out that Australia has abundant resources of raw materials like lithium used for producing rechargeable batteries for a wide range of electric devices such as mobile phones and electric vehicles, but it is shipping its commodities offshore rather than exploring the opportunities along the battery supply chain.

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To extract more value from its rich mineral reserves, Australia will aim to attract investment to develop a domestic battery industry through building a supply chain covering chemical technology and cell manufacturing, and it is prepared to offer financial incentives, according to the report.

Following the strategy, the Australian government will offer annual tax offsets of up to US$197,700 for investors and a 10-year capital gains exemption for investments held for at least a year.

“With growing global demand for lithium-ion batteries, Australia has a once-in-a-generation opportunity to transform into a major processing, manufacturing and trading hub for lithium-ion batteries,” said Simon Birmingham, Minister for Trade, Tourism and Investment.

Australia has the world’s third largest reserves of lithium and overtook Chile as the world’s biggest supplier of lithium last year as its lithium production reached 18,700 tonnes and took up 43.5% of global market share. The country, however, captures only 0.53% of ultimate value of its exported mineral.

According to the report, Australia now produces nine of the ten mineral elements required to produce most anodes and cathodes of lithium-ion battery, while having secure access to all of the raw materials needed for lithium-ion battery production.

The report also lists a series of competitive advantages Australia can offer for investment in downstream mineral processing and the local development of the lithium-ion battery supply chain.

But the country still needs to secure proprietary equipment, processes and technology to convert its mineral resources into lithium-ion batteries, the government report said.

Despite a great potential for Australia to become a world powerhouse in lithium-ion battery manufacturing, the new strategy may find difficulties in its implementation since most of Australia’s lithium supply will be exported under existing contracts, said Leonard Rowe, the business development director at mining consultants AME Group in Sydney.

“(The strategy) is a good idea but the reality of it is probably remote as we would be competing against the global powerhouse that is China which already has significant scale, and is both the largest manufacturer and the largest market,” he said.

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