19/07/2018 - 12:50

Forethought needed for lithium boom dreams

19/07/2018 - 12:50

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Lithium advocates have been cautioned to separate facts from hype as it is not yet clear if battery manufacturing in Western Australia will be practical, although refining plans should proceed immediately, according to Mckinsey & Co partner Prabhav Sharma.

Forethought needed for lithium boom dreams
Prabhav Sharma says moves towards hydroxide refining should proceed apace. Photo: Gabriel Oliveira.

Lithium advocates have been cautioned to separate facts from hype as it is not yet clear if battery manufacturing in Western Australia will be practical, although refining plans should proceed immediately, according to McKinsey & Company partner Prabhav Sharma.

Speaking at the state government’s Lithium and Energy Metals Industry Consortium meeting this morning, Mr Sharma said Western Australia would definitely be a world leader in mining and processing lithium ore.

“Some people expect we can go much further,” he said.

“Chemical processing to cathode manufacturing, to battery manufacturing itself.

“We don’t yet know if that vision is practical.

“However, what we know today is venturing into immediate processing is a viable next step and should be explored as soon as possible.”

There are a number of refining projects in various stages of completion, led by Tianqi Lithium’s two train project in Kwinana.


Tianqi Lithium's plant in Kwinana, under construction earlier this year.

Albemarle’s Kemerton facility has opened tender for about 30 works packages, after scoring a green light from the Environmental Protection Authority in June.

Other refining plans include Kidman Resources’ joint venture proposal in Kwinana, Neometals' plans in Kalgoorlie, and those of Mineral Resources in the Pilbara.

“Lithium hydroxide processing is an exciting emerging opportunity for WA,” Mr Sharma said.

“Given proximity to ores, the existing chemicals hub in Kwinana, and a clear shortfall in demand.

“As a no-regret move, invest now in lithium hydroxide, and build a technical talent, as that will be the key to winning this market.”

McKinsey’s demand projections for lithium hydroxide are bullish, and importantly are underpinned by serious economic modelling of switching processes from petrol to electric vehicles.

From about 240,000 tonnes of lithium carbonate equivalent last year, global demand will rise to be at least 630,000tpa, or as much as 860,000tpa, Mr Sharma said.

The majority of that demand increase will be in lithium hydroxide, where WA has a cost advantage, rather than lithium carbonate, he said.

Taking position

Regional Development Australia’s recent Lithium Valley report highlighted that there is significant value added across the lithium supply chain, with Australian mining worth about 0.5 per cent of the total lithium industry.

Refining was about 1.5 per cent, while electrochemicals were around 10 per cent, for example.

Around 75 per cent of the industry’s production value was generated through assembling, the report said.

But one question the industry will need to resolve is whether manufacturing will be cost competitive, and made without destroying shareholder value or taxpayer dollars.

WA chief scientist Peter Klinken said he had heard doubts about the potential for manufacturing in the state, with high labour costs and intellectual property largely tied up overseas.

“Manufacturing has actually changed, it has changed considerably because most of it is automated,” Professor Klinken told representatives at the consortium meeting.

“We have some really great examples of high-tech manufacturing,  Austal, Civmec, Orthocell.”

Energy costs were also becoming increasingly important, he said.

For intellectual property, the state could use the planned cooperative research centre for future battery industries, or do deals with overseas entities, Professor Klinken said.


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