Is Australia hurting its lithium opportunity?
Australia’s lithium industry has expanded significantly over the past year.
New mines have launched production, others are nearing completion and expansions are being discussed.
There are, however, fears that Australia will miss out on its share of the booming global lithium opportunity that shows no signs of slowing down.
Lithium Australia managing director Adrian Griffin has warned that Australia’s opportunity to become an international anchor point in the $213 billion global battery market could be derailed by proposed Federal Government changes to research and development (R&D) funding in its latest Budget.
The Federal Government plan would see a $4 million cap on cash rebates for companies that were spending on R&D and had turnovers of less than $20 million.
Griffin said Australia’s lithium industry risked being consigned to international backwaters if an opportunity to become a global front-runner in the emerging battery technology race was allowed to slip.
“The window for this opportunity is closing fast. If Australia shows initiative by providing R&D incentives for industry, we can capture an extra 12-27 per cent (an estimated extra $25-57 billion) of the value of the lithium chain globally,” Griffin said.
“But Australia will never get there unless the Federal Government removes its newly imposed cap, which limits research and development rebates within the lithium-related sector to $4 million a year maximum for development companies with less than $20 million a year in revenue.
“Previously, the rebates were open-ended for revenue-limited operations, which in reality, are the companies driving the current push to carve a greater space for Australia’s abundant ‘new energy’ resources (lithium, manganese, cobalt and rare earth metals) in a rapidly expanding global battery market.”
The Federal Government proposal may have disappointed Australian companies, but progress towards taking advantage of the lithium opportunity is on track elsewhere.
Western Australia’s government launched a taskforce in May that will develop a plan for the state to capitalise on its potential to produce and process lithium and other battery metals.
The Lithium and Energy Materials Industry Consortium, which met yesterday, is fast tracking completion of a strategy for the sector within the next six months.
It plans to deliver a strategic direction for the sector, and assist in accessing funding to facilitate growth and diversification, job creation and research outcomes.
“The consortium brought together government and industry representatives from across the battery value chain to identify the key initiatives required to make the most of this once-in-a-lifetime opportunity for Western Australia,” Mines Minister Bill Johnston said.
The West Australian Government last week released a report that flagged Kwinana south of Perth as a potential location for the development of a ‘Lithium Valley’ in the state.
Griffin urged the Federal Government to also back the development of a ‘Lithium Valley,’ much like California’s Silicon Valley, in Australia.
“Clearly, if we are to pursue the Lithium Valley concept with passion, as we all wish to, the Federal Government needs to recognise the innovative status of the industry, as it does with biotech, and retain an R&D environment competitive with other jurisdictions and this developing industry,” Griffin said.
“There isn’t one company in the Australian energy-metals supply chain, including Lithium Australia, that doesn’t want to see an Australian Lithium Valley established and prosper.
The returns to government, industry and participants alike, is mind-blowing in terms of scope, opportunity and capacity.”
Lithium Australia is the only company in Australia to produce local, new-era battery cathode materials for customer tests globally.