Battery plays precursor to integrated sector

KWINANA’S location as the hot spot for battery-linked development in Western Australia, and possibly the nation, may be a quirk of history but its twin political alignment at both state and federal levels cannot have been harmful.

Newly installed Premier Roger Cook is the member for Kwinana, and he succeeds former leader Mark McGowan, who represented neighbouring Rockingham, which has also had significant battery-related projects located in its industrial north.

The cities of Kwinana and Rockingham also make up the entirety of federal Minister for Resources and Northern Australia Madeleine King’s electorate of Brand.

While Kwinana and, by extension, East Rockingham, are accepted places for this kind of activity and, additionally, sit relatively close to the lithium mining hub at Greenbushes, they have also benefited from a more recent industrial renewal concept based around electrification, the so-called Lithium Valley.

In the end, though, it is more than a political construct.

Billions of dollars have already poured into developments in the area and there is more to come in the next phase.

Mr Cook highlighted Perth’s major industrial zone in a speech last month, viewed as his first agenda setting moment, noting its part in the state’s emergence as a green energy superpower.

Mr Cook said massive downstream processing projects led by Tianqi Lithium and Covalent Lithium, both in Kwinana, were a foot in the door to ensuring WA did not miss out on value-add opportunities for the new wave of battery minerals.

The focus was not just for big-ticket items.

In July, Mr Cook announced funds under a new state program, which were aimed at smaller, less-developed projects.

“Last month, the WA government revealed it would support 40 innovative and job-creating projects through our Investment Attraction Fund,” Mr Cook said.

“Nearly $150 million has been put towards diversifying our economy.”

Two battery-related projects, including one in East Rockingham, were granted a combined $7.4 million from that fund, while several others have received land allocations in the Kwinana-Rockingham Strategic Industrial Area.

At federal level, the government is also on message when it comes to battery and critical minerals developments in Kwinana.

At least four of the WA battery-related projects identified by Business News have received funding from the federal government’s Critical Minerals Development Program, amounting to $17.7 million of the $50 million in announcements by Ms King in May.

Two of those projects, Australian Energy Storage Solutions and IGO’s Integrated Battery Material Facility, are in Kwinana or its industrial neighbour, East Rockingham.

They received a cumulative $10.6 million in grant funding.

Another WA company, Ecograf, received $2.9 million in funding to support a graphite qualification facility at Lucas Heights in NSW.

But, according to the company, that spending has merely accelerated its plans in Rockingham where a 5,000 tonnes per annum commercial demonstration battery anode materials plant was to be built as a first stage.

Instead, if things pan out well, it expects that WA facility to leap straight to commercial-scale operation at up to 25,000tpa.

Ms King said the projects would speed up development of Australia’s critical minerals sector and help the country and its export partners lower emissions and meet net-zero commitments by 2050.

“The successful projects will create jobs and opportunities across regional Australia and help Australia realise its ambitions to be a clean energy superpower,” she said in her announcement.

“The 13 projects to receive funding under the Critical Minerals Development Program grants include plans to produce key inputs to lithium-ion batteries for electric vehicles, and to support supply chains for advanced manufacturing for aerospace, medical, energy and defence applications.

“The grants will support Australia’s new Critical Minerals Strategy, to be released shortly and which will outline how Australia can capture the significant opportunity of growing its critical minerals processing sector.

“Australia has remarkable potential to meet the increasing global demand for the critical minerals needed for clean energy technologies, such as electric vehicles and batteries, as the world moves to decarbonise.”

It is heady times for those in this sector and it is not just WA and the Commonwealth giving established players and newcomers a leg up.

Policies in major markets have fuelled encouraging sentiment, especially the US government’s Inflation Reduction Act, including tax credits for electric vehicles and charging stations, which has created the biggest buzz.

“Supporting the positive outlook for the company’s graphite project developments are the recent announcements by the EU Commission and the US government on policies and legislation to support new battery mineral supply chains,” ASX-listed Ecograf said recently.

“The biggest impact arises from release of US Department of Treasury IRA guidance in March on new clean vehicle EV tax credit criteria that will shape future critical mineral supply chains into the US.”

Miners go downstream

There is a clear delineation around the big-ticket items in this space, which mainly involve a downstream processing element for an existing or proposed miner.

Covalent Lithium, a joint venture between Wesfarmers and Chile’s SQM, is a $2.6 billion spend that includes the development of the Mt Holland lithium mine as well as a refinery in Kwinana to produce lithium hydroxide.

To highlight the strength of sentiment in this field, that project is going ahead despite a cost blowout from $1.9 billion to $2.6 billion earlier this year.

But it is not all smooth sailing.

In a parliamentary inquiry into domestic gas reservation policy, Wesfarmers has claimed delays to gas projects are pushing up the price of gas required for processing critical minerals.

The cost of gas has previously been highlighted as a benefit to local processors due to the lower prices in WA compared with the east coast but Wesfarmers claimed that was not necessarily the case given quotes it shared with the inquiry.

In general, when it comes to processing, the big lithium hydroxide projects are the most advanced.

Tianqi and IGO are looking at stage two of their existing Kwinana refinery, which has experienced many delays in reaching nameplate capacity.

At the Kemerton Lithium Plant, operator Albemarle agreed to take full ownership this financial year from 40 per cent joint venture partner Mineral Resources.

The first of two 25,000tpa trains was completed in November 2021 and the second train is scheduled for completion this financial year.

Also, in the same vein of earlystage processing of battery materials has been BHP with its operational nickel sulphate plant at Kwinana.

Another of the big players at the top of this development list is the Integrated Battery Material Facility owned by IGO and the Forrest family investment vehicle Wyloo Metals at Kwinana.

Outside the big players, Australian Energy Storage Solutions, which trades as Austvolt, is in something of a race with IGO/Wyloo to become Australia’s first commercial-scale producer of precursor cathode active material (pCAM).

Chaired by former state treasurer Mike Nahan, Austvolt last month launched a demonstration laboratory for pCAM, a vital lithium battery input.

Launched by Mr Cook, whose government put in $3 million for the laboratory through its Investment Attraction Fund and allocated 8.8 hectares of land in the Kwinana-Rockingham Strategic Industrial Area, the private company has plans to produce up to 40,000 tonnes of pCAM by 2027 at a capital cost of $350 million.

It has raised $1.9 million in private capital to date from local and overseas sources and is in the market for about $5 million as an early-stage investment ahead of a proposed $25 million raising in the near term.

Austvolt managing director and founder Peeyush Mathur said a stock market float was a consideration, possibly by the end of the financial year, although bringing in a big partner was also a possibility.

Austvolt was also granted $5.5 million in May by the federal government’s $50 million Critical Minerals Development Program for a pilot plant in Kwinana where it is seeking to be the first commercial-scale producer of pCAM in Australia.

The Bentley laboratory facility will enable Austvolt to produce samples of its pCAM product, which can be used in battery manufacturing trials with the electric vehicle industry.

Nickel sulphate for the testing process is coming from BHP Nickel West’s plant in Kwinana, signalling the first step in the chain of emerging battery materials hopefuls in an area the state calls Lithium Valley.

Two other projects backed by small players, Australian Vanadium Project and Collie Graphite Battery Anode Materials Facility, are advancing downstream processing projects to integrate with local mining plans.

Both are owned by independent ASX-listed players and have chosen locations outside Kwinana.

International Graphite has a proposed mine at Hopetoun on the state’s southern coast with a battery anode materials facility at Collie.

Australian Vanadium, which has a mine proposed near Meekatharra, has a vanadium pentoxide refinery planned near Geraldton and vanadium electrolyte manufacturing facility in Wangara.

International Graphite recently won approval to install new graphite ‘micronising’ equipment for a qualification-scale facility in Collie where it already has a pilot plant and ultimately plans to build a commercial-scale operation costing at least $441 million.

If completed the Collie plant could produce 18,600tpa of coated ‘spheroidised’ purified graphite and 17,000tpa of micronised by-products.

It plans to use imported graphite concentrate and, once commissioned, ore from its proposed mine near Hopetoun.

The company said the 200tpa qualification-scale plant was designed to process graphite concentrates to produce a commercial micronised graphite product for quality and performance evaluation by potential customers.

In preparation for the next stage of its downstream processing journey, International Graphite has also revealed a definitive feasibility study for a commercial micronising facility with throughput of up to 4,000tpa.

International Graphite managing director Andrew Worland said a micronising operation would progress International Graphite’s plans to be the first mine-to-market producer in WA of graphite battery anode materials for the growing lithium-ion battery market.

A mooted lithium sulphate producer in the state’s north is the London Stock Exchange-listed Alkemy Capital Investments, which acquired land access in a strategic state government release at Boodarie in Port Hedland.

Alkemy representative Tony Veitch said the group, which is not a miner and planned to export production to the UK, was still in discussions with potential feedstock suppliers for the facility.

A recently released feasibility study into a Port Hedland battery minerals processing operation has determined a $500 million cost for the first of a possible four train plant.

Alkemy released what it called a class four feasibility study, which shows the Boodarie project would have a net present value of more than $1.5 billion.

Alkemy said each of the four proposed lithium sulphate trains would refine approximately 180,000tpa of Pilbara spodumene concentrate to produce 40,000tpa of lithium sulphate, with lithium content equivalent to 24,000tpa lithium hydroxide.

The company said the value of the Port Hedland lithium processing business represented about a quarter of the value of Alkemy’s full project, which included a 24,000tpa battery-grade lithium hydroxide plant at the Teesside Freeport industrial area at Wilton in the UK.

“Conducting the first part of the refining process in Australia minimises the quantity of waste material exported and reduces both the shipping cost and the embedded carbon of the resulting lithium products,” the company said in an announcement.

“This new Pilbara to Teesside supply chain epitomises the new critical minerals supply chains made possible under the recently signed free trade agreement between Australia and the UK and will leverage the competitive strengths of Australia in mining and minerals processing and the UK in chemical refining,” it said.

Vanadium on the up

Much of the activity in WA reflects the pre-eminence of lithium in the electric vehicle battery market, not to mention many other applications from phones to Tesla Powerwalls, as well as the state’s role as the world’s biggest producer of the metal.

However, vanadium is emerging strongly as an alternative investment strategy here.

Australian Vanadium chief executive Graham Arvidson believes there are many advantages in opting for vanadium flow batteries, which is decades-old proven technology that is more practical and cost-effective than lithium in certain uses, such as static storage devices for homes and commercial users.

While Australian Vanadium’s big-ticket item is its vanadium pentoxide plant proposed for a site near Mullewa where the Mid West’s railway network and the Dampier to Bunbury Natural Gas Pipeline converge, it is advancing plans to build vanadium flow batteries using imported technology and, initially, raw materials.

In July, regional energy provider Horizon Power contracted Australian Vanadium’s subsidiary, VSUN Energy, to purchase its first vanadium flow battery for a long-duration storage pilot in Kununurra.

The 220-kilowatt hour battery, which will be able to deliver up to 78kW of power, is much bigger than the residential batteries it is also seeking to market, which will have a similar capacity to a Tesla Powerwall, typically about 13.5kW.

“In some senses we are starting from the end,” Mr Arvidson said.

“We are selling batteries, then we’ll make electrolyte and ultimately, we’ll mine it.”

Mr Arvidson said the major processing of vanadium pentoxide would take place in the Mid West but the final step in turning it into electrolyte would occur closer to where batteries would be installed, such as in its Wangara pilot facility, as a great deal of the weight in this type of flow battery was water.

“Producing electrolyte in Perth is really a competitive advantage,” he said.

“We can be early manufacturers to confirm the quality of our electrolyte.”

There are two other emerging players in the vanadium flow battery sector – locally focused Australian Flow Batteries, which started out as Juice Batteries, and some familiar WA faces, who have a significant interest in South Korea.

AFB’s team is chair Mark Reynolds, chief executive Tony Hulme, managing director Shane Meotti and director of operations Simon Kemp.

Mr Meotti said the Juice business started off focused on researching how to miniaturise vanadium redox flow batteries as a solution to storing energy from the huge numbers of rooftop solar units installed in Australia. Having developed battery solutions for commercial and residential use as well as innovative mobile portable solar array, it is now ready to commercialise as AFB, initially to commercial customers, such as miners.

It is establishing a field trial at the Australian Marine Complex in Henderson with a 200kW set-up.

AFB has settled on a 20kW version as its intended staple offering at residential level, which is 12 to 18 months away.

While AFB’s key intellectual property is the know-how to make the batteries work, it plans to initially assemble at a factory in Bibra Lake with a goal to being a 100 per cent Australian manufacturer.

It is targeting 10,000 batteries per year by 2025 and 100,000 by 2027, although not necessarily from the current location.

The company is raising $5 million from private sources.

In a similar space is AVESS, a company chaired and managed by Young Yu, who has former senior state minister Dean Nalder and former managing director and founder of Perth Energy Ky Cao on his board.

AVESS wants to become an Australian manufacturer of vanadium redox flow batteries, by leveraging its Korean technology joint venture with electronics manufacturer DST Co.

It has a $1 million project to build a battery with 50kW power output and 250kWh (five hours) of energy storage in a standard shipping container for a WA mining company.

That is taking place in Perth and is now close to factory testing.

“The project will be fully funded, and the demonstration partner has the option to invest in AVESS subject to demonstration outcome,” a company spokesman said.

It expects to build a second unit to provide 100kW/500kWh for the project.

Another local player is the Future Battery Industry Cooperative Research Centre, which is based in Perth but has projects around the country.

The FBICRC was seeded with $25 million in Commonwealth funds, a sum brought to $150 million by industry contributions.

It said it had 73 partners invested in 15 research projects valued at $120 million that spanned the battery value chain.

A notable project is its WA-based cathode precursor production pilot plant for which it has $18.4 million committed, including $900,000 from the state government.