Australia is a Clean Energy Superpower

25 July, 2023

Australia’s bid to advance in renewable energy technologies.

Australia is a trusted mining partner to countries worldwide. However, it now faces the urgent need to diversify its downstream options as global decarbonisation gains momentum.

With the rise of decarbonisation, new market opportunities emerge, and early adopters have the advantage of capturing market share and gaining a competitive edge.

Australia recognises that supporting the green transformation presents a once-in-a-generation opportunity.

As a mining superpower, Australia is already a significant supplier of materials used in renewable energy technologies. However, the country has the potential to go beyond being a mere green-energy quarry and establish vertically integrated renewable industries domestically.

One promising avenue is the development of a local battery supply chain, which has been identified as a critical commercial pathway by the Future Battery Industries Cooperative Research Centre (FBICRC).

“The clean-energy transition is moving faster,” FBICRC chief executive officer Shannon O’Rourke told Australian Mining.

“Government spending on clean energy has increased 30 per cent in the past two years.

“Greater subsidies are driving electric vehicle (EV) demand and increasing commodity prices and volumes. In the past 18 months, the opportunity for Australia has doubled.”

A report released by FBICRC in March, titled “Charging Ahead – Australia’s Battery Powered Future,” projects that Australia’s battery opportunity could contribute $16.9 billion to the economy by 2030.

The report emphasises Australia’s mining and geological strengths, particularly in critical minerals, and how this can support downstream capabilities.

One crucial aspect is the production of battery materials and components, such as refining and active materials.

“Australia is cost-competitive across the entire value chain,” O’Rourke said.

“We are eight per cent cheaper than Indonesia to produce advanced materials and five per cent cheaper than the United States to produce cells.”

The country also has a significant advantage in refining lithium hydroxide monohydrate (LHM), thanks to its abundant lithium reserves and mining capacity, leading to natural synergies with downstream applications.

Already, some Australian companies, like Mineral Resources (MinRes) and IGO, are taking advantage of onshore lithium hydroxide opportunities, producing the refined product from their downstream processing facilities in Kemerton and Kwinana, respectively. The produced lithium hydroxide is then exported for further processing into active materials used in renewable batteries.

Furthermore, Australia’s local demand for renewable energy materials is surging, with a growing renewable energy sector seeking more materials than ever before.

“Australia’s local demand is skyrocketing,” O’Rourke said. “Bloomberg reports that Australia has the largest pipeline of energy storage projects behind China, and a recent Sunwiz report shows that Australia’s behind-the-meter battery storage market is up 55 per cent year on year.”

The Australian Government is funding the construction of eight large-scale batteries across the country to store renewable energy and reduce reliance on fossil fuels.

To harness its battery opportunity effectively, Australia must approach the matter holistically and build an ecosystem that involves multiple suppliers, customers, producers, service companies, a flexible workforce, research institutions, and government support.

“Building that incrementally could take decades, and no other country is taking that approach. Industrial growth is non-linear and needs to be supported by trade and accelerated by domestic support.

“Australia is in a good position. It has multiple projects either announced or operating across all elements of the value chain including refining, materials, (and) cell and system manufacturing.

“We have a complete value chain today, including cell manufacturers. The challenge is building out more capacity and scaling up.”

Although Australia does not need to match China’s scale, it must achieve minimum economic scale. The country’s strong mineral resources, secure supply, and ESG credentials contribute to its competitive edge.

The Australian Government has introduced the National Reconstruction Fund (NRF), which allocates $15 billion to transform future-facing industries, including renewable energy and downstream opportunities in the resources sector.

Additionally, the Critical Minerals Development Program has provided significant funding to support emerging upstream and downstream projects in the battery supply chain.

Collaboration plays a vital role in this venture, with key mining industry players and research institutions coming together through FBICRC to further Australia’s understanding of the active materials industry. The collaborative spirit supports the pilot plant facility exploring the local production of NCM cathode materials.

Australia’s battery opportunity is evident, and with enough developments, the establishment of an integrated supply chain seems feasible. However, to make this dream a reality, all stakeholders across the battery supply chain must collaborate and work together to ensure Australia’s success in this promising sector.