Australia seeks investment from European electric carmakers

Western Australia mining region competes with China to supply lithium, cobalt and graphite

Europe should invest in Australia to secure supplies of the raw materials it needs for electric car batteries in order to avoid relying completely on China, a mining official from Western Australia has warned.

The region is holding talks with European companies to encourage them to buy into its rich resources of lithium, cobalt and rare earths, which are critical for clean energy, according to Bill Johnston, Western Australia’s minister for mines.

The European Commission has said Europe will need up to 25 battery “gigafactories” by 2025 to meet the demands of its carmakers as they shift towards electric cars. But Europe produces almost no lithium, cobalt or graphite, the raw materials needed for lithium-ion batteries, all of which are found in Australia.

Concerns are rising that China has built a dominant position in the supply chain for clean energy technologies. This month Australia published a list of 15 rare earth and critical mineral projects that would require A$5.7bn to develop, as part of US-Australian efforts to reduce reliance on Beijing. “

There are many opportunities in Western Australia, they’re not all taken,” Mr Johnston told the FT in London. “While we welcome Chinese investment we’re very keen to welcome alternative investment. There’s almost nothing that goes into a battery that we don’t produce in Western Australia. You can look at the periodic table and I’ve probably got a world-class project for you.”

The EU’s Critical Materials strategy in 2017 did not even mention Australia, Mr Johnston said.

“If you’re a UK or European investor who wanted to build a gigafactory and you’re thinking about securing a supply chain we’re a strong partner because we’re not a competitor,” he said. “We do think there’s a genuine opportunity for European investment into the battery metal chain.”

As carmakers seek greener supply chains, Western Australia also has large potential for solar and wind energy to power mines and processing plants, Mr Johnston said.

The majority of the investment into battery raw materials in Western Australia has come from China, whose companies dominate the supply chain for lithium, cobalt and rare earths.

Last week China’s largest lithium producer Tianqi Lithium opened a plant outside Perth that will produce lithium hydroxide for batteries, which is the first automated lithium chemical manufacturing facility outside China. The Shenzhen-listed company also owns a 51 per cent stake in the largest lithium mine in the country, the Greenbushes mine.

This month China’s largest battery company CATL bought an 8.5 per cent stake in lithium producer Pilbara Minerals.

“What I’m concerned about is to make sure there’s a range of options for industry in Europe,” Mr Johnston said. “Europe wants a clean, green ethical supply of materials [and] they need to consider how that’s going to be achieved.”

Date: September 17th, 2019
Source: FT
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