BHP understands Australia’s significant critical minerals opportunity, but it also recognises there are hurdles the local mining sector must overcome.
As BHP president Australia Geraldine Slattery explained at a recent American Chamber of Commerce event, Australia will have to approach its critical minerals future differently to its previous iron ore and coal plunders.
“Unlike Australia’s iron ore and metallurgical coal endowment – which were found in large quantities and close to the surface – our critical mineral resources, particularly nickel and copper, are deeper or more remote or individually smaller in scale,” Slattery said.
“This can make them more complex and more expensive per tonne to produce.
“Take copper. Australia has significant copper resources, and the potential to be a significant copper player.
“The South Australia copper province is a case in point.”
Slattery said that while South Australia boasts its fair share of high-grade copper deposits, they are deep beneath the surface and require underground mining methods.
“(But) in Chile, one of Australia’s key competitors, copper endowments are larger in scale, closer to the surface – allowing for open-pit mining methods,” Slattery said.
“This translates to a higher cost-per-tonne to develop and operate copper mines in Australia, despite our high-grade endowment.”
Australia is also facing competition regarding its nickel future, with Indonesia a premier jurisdiction for the mining and processing of the battery metal.
“Australia has high quality resources, and one of the largest nickel reserves in the world,” Slattery said. “However, we face stiff competition from Indonesia’s large nickel reserves that are more accessible and can be extracted through open-pit methods.
“And Indonesia is highly motivated to aggressively invest in technologies to produce nickel at scale and do so sustainably.”
In discussing this reality, Slattery demonstrated the fact there won’t be the same ease in developing critical mineral deposits in Australia as it was for iron ore and coal.
“Yes, Australia has many large, high-quality resource endowments,” she said. “But we cannot afford to assume that we will have the same degree of comparative advantage in critical minerals as we have enjoyed in iron ore and metallurgical coal.
“As I said before: it all starts with the rocks – the quality and quantity of deposits and the degree of difficulty and cost involved in extracting those deposits drives the investment decision.”
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Papua New Guinea’s (PNG) Independent Consumer and Competition Commission (ICCC) has granted clearance for Newmont to proceed with its acquisition of Newcrest.
After a three-month process beginning in February 2023, Newmont secured a $26.2 billion takeover deal with Newcrest.
The Canadian Competition Bureau issued a ‘no action’ letter clearing Newmont’s announced transaction with Newcrest under Canadian competition law in mid-July.
Newmont has since been continuing to advance other regulatory approvals, such as PNG’s, and it expects to close the transaction in the December 2023 quarter.
Newmont still needs regulatory approvals from the Australian Competition and Consumer Commission (ACCC), the Australia Foreign Investment Review Board (FIRB), the Japan Fair Trade Commission (JFTC), the Philippine Competition Commission (PCC), and the Korea Fair Trade Commission (KFTC) to complete its acquisition of Newcrest.
Additionally, Newmont has been in consultation with Newcrest, and through this has determined that a pre-merger notification under the Hart–Scott–Rodino Antitrust Improvements Act of 1976 will not be required in the US for the transaction to proceed.
“We appreciate the ICCC in Papua New Guinea carefully reviewing and clearing our proposed acquisition of Newcrest,” Newmont chief executive officer Tom Palmer said.
“Lihir in PNG is one of the world’s great gold mines and a Tier 1 operation by any measure. In addition to Lihir, we see profitable gold and copper growth through the world-class Wafi-Golpu project.
“We remain committed to building strong, mutually beneficial and long lasting relationships with PNG’s government and local communities. As part of this commitment, Newmont plans to establish PNG as a standalone fifth region in our portfolio with an in-country senior leadership presence and pursue a secondary listing of Newmont depositary interests on the PNG’s National Stock Exchange (PNGX).”
Both miners will continue engaging with the PNG Government and regulators about other approvals and clearances for the takeover.
Westgold Resources has released its guidance for the 2024 financial year, hoping to mine more gold at a lower operating cost.
After delivering on production guidance for 2023, Westgold has set itself the goal of producing between 245,000 to 265,000 ounces of gold for next year. This is a 5,000 ounce increase on 2023.
The company has also decreased its projected al-in sustaining costs to $1800 to $2000 per ounce.
“Westgold delivered its guidance in financial year 2023, hitting the top end of production guidance and mid-point of costs. This was achieved while undertaking an organisational transformation which has placed the company in a position to build cash and enhance profitability on a sustainable basis.”
Westgold is set to increase its growth capital to $130 million for the 2024 financial year, $60 million of which will be invested towards new growth opportunities at the company’s operations.
Thirty million will go to developing the Great Fingall decline. At steady state, Westgold expects Great Fingall to produce between 300 to 450 thousand tonnes of ore at four to six grams per tonne of gold.
The Big Bell expansion will receive $24 million in capital funding for mine development, ventilation and development of a surface located paste plant. A feasibility study and final investment decision is expected in the first quarter of 2024.
Westgold has allocated $6 million to the restart of Fender, which it expects to produce around 330 thousand tonnes per annum at 2.7 grams of gold per tonne.
“The business is now structured to deliver safe and profitable ounces and critically, our financial year 2024 growth ambitions are funded from our existing cash resources. Looking forward, prudent capital investment into our organic growth projects such as Great Fingall, the expansion of Big Bell and restart of Fender establishes a growth runway into financial year 2025.”
Western Australia is set to see a renewable energy boost with Horizon Power’s purchase of a vanadium redox flow battery.
Vanadium is a metal found in mineral deposits. Currently, there is only one vanadium mining lease granted in Queensland, located in the North West Minerals Province. The Saint Elmo vanadium project began construction in 2022.
Australia’s first commercial vanadium flow battery was completed in South Australia in June this year.
The WA vanadium flow battery is expected to arrive in Perth in 2024. Western Australia Energy Minister Bill Johnston said the delivery will help the state lead the way in clean energy technology.
“Vanadium redox flow batteries are specifically designed to deliver energy over a long period of time, which is crucial for achieving the high levels of decarbonisation we are after,” Johnston said.
“If the pilot is successful, there is potential to expand the use of long-duration, 100 per cent renewable energy across Horizon Power’s 2.3 million square-kilometre network.”
The 78-kilowatt battery will provide Horizon Power will key learnings around how renewable energy can be integrated into the grid system.
Horizon Power has signed an agreement with VSUN Energy, a subsidiary of Australian Vanadium Limited, for the purchase, installation, and commissioning of the vanadium battery.
Strandline’s project portfolio contains high quality assets which offer a range of development options and timelines, geographic diversity, and scalability. They include the world-scale Coburn mineral sands project in Western Australia, currently ramping up into production, and the emerging Tanzanian mineral sands growth projects Fungoni, Tajiri, and Bagamoyo.
Strandline’s exploration and development focuses primarily on discovering and evaluating mineral sands ore bodies that show an abundance of higher value minerals, nominally zircon, rutile and monazite, with the lesser value minerals of ilmenite and garnet as a co-product to the product suite.
Mineral sands are heavy minerals found in sediments on, or near to, the surface of ancient beach, river or dunal system. Strandline’s proposed mineral sands mining method involves both dry mining (Coburn and Fungoni projects) and wet hydraulic mining (Tajiri project). Mining units and wet concentration plant (WCP) separate the heavy valuable minerals (zircon, monazite, rutile, leucoxene, ilmenite) from the waste material. The WCP design utilises multiple stages of high-capacity gravity separation and classification to produce a high grade +90% heavy mineral concentrate (HMC).
Following four months of record gold production at its King of the Hills (KOTH) gold mine, Red 5 has released its June 2023 quarter report.
During the quarter, the KOTH mine produced 61,705 ounces (oz) of gold, a significant increase from the 40,869oz produced in the March quarter.
Red 5’s June quarter sales equalled to 58,960oz, an increase from its March quarter’s 40,907oz. These gold sales resulted in operating cash flows of $50.6 million.
The company achieved the upper end of production and mid-range of cost guidance for the second half of the 2023 financial year, with production of 102,574oz at an AISC of $1837/oz against guidance of 90k-105k oz at AISC of $1750–1950/oz.
On top of successful operations, the company saw an improvement in safety, seeing no recordable injuries.
An ongoing board renewal process also began in the June quarter, with Russell Clark being appointed as chair and Peter Johnston being appointed as a non-executive director.
As of June 30, Red 5’s net debt position improved, reducing by $44.5 million to $81.9 million, its cash and bullion being $45.9 million, $22.0 million of bank debt being repaid, with $127.8 million outstanding on the KOTH debt facility.
“The June quarter has been a watershed period for Red 5, with the KOTH mine delivering strong results for the company, both operationally and financially and with a greatly improved safety performance,” Red 5 managing director Mark Williams said.
Red 5’s FY2024 production guidance has been set to 195k–215k ounces at AISC of $1850–$2100/oz.
“Our clear focus for the year ahead is to continue delivering safe, consistent and profitable ounces from the KOTH processing hub. This will, in turn, provide us with a platform to execute our longer-term growth strategy,” Williams said.
South32’s Sierra Gorda copper mine in Chile. Image: South32
ARI was on hand for a recent fireside chat with South32 CEO Graham Kerr, who reflected on how the major mining company has gotten to where it is today.
South32, which was demerged from BHP in 2015, describes itself as a “globally diversified mining and metals company” and is now transitioning to become a key manganese producer in the US.
The company’s future is certainly bright, but chief executive officer Graham Kerr admitted South32 initially had a portfolio that could only be described as a “mixed bag”.
“Within BHP, there are lots of assets that have a lot of opportunity for development in the future that weren’t quite getting the love or systems they needed,” he said during a fireside chat at a recent Melbourne Mining Club luncheon.
“For me, the demerger was a great opportunity for both companies to be better than what they were together. (And) both companies have continued to change and evolve.”
South32’s commodity mix included energy coal, metallurgical coal and manganese, with nickel, lead, silver, zinc and aluminium also featuring in the portfolio.
It was from this position that Kerr and his colleagues set about finding potential in base metals.
Eight years on, the company’s portfolio has changed a lot since Kerr sat in the first South32 meeting with then-chairman David Crawford.
“We certainly had a belief for what assets belonged in South32 and what assets didn’t belong in South32,” Kerr said.
“If you take a step back, what we did actually recognise is if you look at the world today, with a lot of the M&A activity that occurred in the prior two decades, most of the mid-tier mining companies had disappeared.
“So part of the advantage of South32 was it’s a mid-tier-sized mining company … and for a mid-tier company, you only need one or two great discoveries or one or two great acquisitions and you can fundamentally change the nature of the group and create a lot of value for your stakeholders.
“It was clear some commodities had a more attractive future than others. We talked about wanting copper and we did talk about expanding our zinc and nickel presence, and those commodities in particular have been far more attractive in a world of decarbonisation.”
South32 chief executive officer Graham Kerr.
Those discussions laid the foundations for South32 as the company transitioned its portfolio and projects to be largely based in the Americas.
The US Government’s recent endorsement of the Hermosa project, located in southern Arizona, has meant South32 could become the country’s primary manganese producer.
Hermosa, which has the potential to produce manganese and zinc, has been added to the FAST-41 project list, which is designed to create better processes for complex critical infrastructure projects. Hermosa is one of the first mining projects to join the program, which could assist it with obtaining federal permits for the development of South32’s Taylor and Clark deposits, both of which are located within the Hermosa project.
According to Kerr, once the Taylor and Clark projects are up and running, South32’s portfolio composition will rise to 85 per cent base metals, with majority of the company’s value in the Americas.
“The inclusion of Hermosa as the first mining project added to the FAST-41 process is an important milestone that recognises the project’s potential to strengthen the domestic supply of critical minerals in the US,” Kerr said. “The project presents a significant opportunity to sustainably produce commodities critical to a low-carbon future.”
South32 is advancing a Clark feasibility study, with a pilot plant recently commencing production. A feasibility study for the Taylor deposit is expected to be completed later this year.
A key part of the project will see South32 engage with local communities to ensure the project has flow-on benefits to the surrounding area.
“Becoming a covered FAST-41 project will make the rigorous federal environmental review and permitting process for this project more transparent, predictable and inclusive for all stakeholders,” South32 Hermosa president Pat Risner said.
“We are committed to working closely with the US Forest Service, cooperating agencies, Native American tribes, and local stakeholders in Santa Cruz County in Arizona to develop this project in a way that benefits the community, minimises impact on the environment, and creates opportunities across the region.”
Alongside its US assets, South32 also has growth options in South America, including a bright future for its Sierra Gorda copper mine in Chile.
South32 purchased a 45 per cent stake in Sierra Gorda in February 2022, but while the company has long been keen to boost its copper presence, it took time to warm up to Sierra Gorda.
“How many people in the room have watched Shrek with their kids before?” Kerr asked the Melbourne Mining Club audience. “There’s a bit where the donkey is talking to Shrek and says, ‘Shrek, you’re like an onion. You’ve got to take the layers off the onion to understand what you’ve actually got’.
“When the business development team first brought Sierra Gorda to me, I was probably like most other people in the market and thought, ‘This is a challenged asset. It’s got a history of having a challenging ramp-up and there’s very little information in the marketplace about it’.
“Every challenge we gave to the business development team to take a layer off that onion, they came back with more positive results.
“In the end, we became convinced that it was the right thing to do.
“We’ve had it for about a year now and we’re really happy with the acquisition. We’ve been really surprised by the upside in the asset and the quality of the people.”
South32’s Hermosa project in southern Arizona.
Alongside its Chile presence, South32 is also involved in earn-in agreements with two emerging copper exploration projects in Argentina – Chita Valley and Don Julio.
South32 recently exercised its earn-in right to acquire a 50.1 per cent interest in the Chita Valley project following a three-year exploration partnership with Minsud Resources Corp.
The major miner signed an earn-in agreement with Sable Resources to explore Don Julio in 2021, with drilling advancing at the project.
Kerr said Argentina could be a copper jurisdiction to keep an eye on in years to come.
“Argentina’s become an interesting location,” he said.
“When we first started doing some work there, we were probably the only ones. You’ve got BHP there, you’ve got Barrick there, you’ve Glencore there – everyone’s sort of pouring money into that jurisdiction at the moment.
“If you look at where it is, it’s on the other side of the Chile mountains where basically all the copper is.
“So I think that’s an area that’s going to develop pretty quickly.”
Whether it’s the Hermosa project in the US, a suite of emerging projects in South America, or any other ‘future-facing’ asset in South32’s portfolio, the company has plenty of avenues to be part of the world’s decarbonisation narrative in the years to come.
And given South32’s strong track record of project execution and expansion, the company’s shareholders can rest assured their stock is in the right place.
South32’s Sierra Gorda copper mine in Chile. Image: South32
ARI was on hand for a recent fireside chat with South32 CEO Graham Kerr, who reflected on how the major mining company has gotten to where it is today.
South32, which was demerged from BHP in 2015, describes itself as a “globally diversified mining and metals company” and is now transitioning to become a key manganese producer in the US.
The company’s future is certainly bright, but chief executive officer Graham Kerr admitted South32 initially had a portfolio that could only be described as a “mixed bag”.
“Within BHP, there are lots of assets that have a lot of opportunity for development in the future that weren’t quite getting the love or systems they needed,” he said during a fireside chat at a recent Melbourne Mining Club luncheon.
“For me, the demerger was a great opportunity for both companies to be better than what they were together. (And) both companies have continued to change and evolve.”
South32’s commodity mix included energy coal, metallurgical coal and manganese, with nickel, lead, silver, zinc and aluminium also featuring in the portfolio.
It was from this position that Kerr and his colleagues set about finding potential in base metals.
Eight years on, the company’s portfolio has changed a lot since Kerr sat in the first South32 meeting with then-chairman David Crawford.
“We certainly had a belief for what assets belonged in South32 and what assets didn’t belong in South32,” Kerr said.
“If you take a step back, what we did actually recognise is if you look at the world today, with a lot of the M&A activity that occurred in the prior two decades, most of the mid-tier mining companies had disappeared.
“So part of the advantage of South32 was it’s a mid-tier-sized mining company … and for a mid-tier company, you only need one or two great discoveries or one or two great acquisitions and you can fundamentally change the nature of the group and create a lot of value for your stakeholders.
“It was clear some commodities had a more attractive future than others. We talked about wanting copper and we did talk about expanding our zinc and nickel presence, and those commodities in particular have been far more attractive in a world of decarbonisation.”
South32 chief executive officer Graham Kerr.
Those discussions laid the foundations for South32 as the company transitioned its portfolio and projects to be largely based in the Americas.
The US Government’s recent endorsement of the Hermosa project, located in southern Arizona, has meant South32 could become the country’s primary manganese producer.
Hermosa, which has the potential to produce manganese and zinc, has been added to the FAST-41 project list, which is designed to create better processes for complex critical infrastructure projects. Hermosa is one of the first mining projects to join the program, which could assist it with obtaining federal permits for the development of South32’s Taylor and Clark deposits, both of which are located within the Hermosa project.
According to Kerr, once the Taylor and Clark projects are up and running, South32’s portfolio composition will rise to 85 per cent base metals, with majority of the company’s value in the Americas.
“The inclusion of Hermosa as the first mining project added to the FAST-41 process is an important milestone that recognises the project’s potential to strengthen the domestic supply of critical minerals in the US,” Kerr said. “The project presents a significant opportunity to sustainably produce commodities critical to a low-carbon future.”
South32 is advancing a Clark feasibility study, with a pilot plant recently commencing production. A feasibility study for the Taylor deposit is expected to be completed later this year.
A key part of the project will see South32 engage with local communities to ensure the project has flow-on benefits to the surrounding area.
“Becoming a covered FAST-41 project will make the rigorous federal environmental review and permitting process for this project more transparent, predictable and inclusive for all stakeholders,” South32 Hermosa president Pat Risner said.
“We are committed to working closely with the US Forest Service, cooperating agencies, Native American tribes, and local stakeholders in Santa Cruz County in Arizona to develop this project in a way that benefits the community, minimises impact on the environment, and creates opportunities across the region.”
Alongside its US assets, South32 also has growth options in South America, including a bright future for its Sierra Gorda copper mine in Chile.
South32 purchased a 45 per cent stake in Sierra Gorda in February 2022, but while the company has long been keen to boost its copper presence, it took time to warm up to Sierra Gorda.
“How many people in the room have watched Shrek with their kids before?” Kerr asked the Melbourne Mining Club audience. “There’s a bit where the donkey is talking to Shrek and says, ‘Shrek, you’re like an onion. You’ve got to take the layers off the onion to understand what you’ve actually got’.
“When the business development team first brought Sierra Gorda to me, I was probably like most other people in the market and thought, ‘This is a challenged asset. It’s got a history of having a challenging ramp-up and there’s very little information in the marketplace about it’.
“Every challenge we gave to the business development team to take a layer off that onion, they came back with more positive results.
“In the end, we became convinced that it was the right thing to do.
“We’ve had it for about a year now and we’re really happy with the acquisition. We’ve been really surprised by the upside in the asset and the quality of the people.”
South32’s Hermosa project in southern Arizona.
Alongside its Chile presence, South32 is also involved in earn-in agreements with two emerging copper exploration projects in Argentina – Chita Valley and Don Julio.
South32 recently exercised its earn-in right to acquire a 50.1 per cent interest in the Chita Valley project following a three-year exploration partnership with Minsud Resources Corp.
The major miner signed an earn-in agreement with Sable Resources to explore Don Julio in 2021, with drilling advancing at the project.
Kerr said Argentina could be a copper jurisdiction to keep an eye on in years to come.
“Argentina’s become an interesting location,” he said.
“When we first started doing some work there, we were probably the only ones. You’ve got BHP there, you’ve got Barrick there, you’ve Glencore there – everyone’s sort of pouring money into that jurisdiction at the moment.
“If you look at where it is, it’s on the other side of the Chile mountains where basically all the copper is.
“So I think that’s an area that’s going to develop pretty quickly.”
Whether it’s the Hermosa project in the US, a suite of emerging projects in South America, or any other ‘future-facing’ asset in South32’s portfolio, the company has plenty of avenues to be part of the world’s decarbonisation narrative in the years to come.
And given South32’s strong track record of project execution and expansion, the company’s shareholders can rest assured their stock is in the right place.
The major miner also revealed annual production records at Western Australian Iron Ore (WAIO), the Olympic Dam operation, and the Spence copper mine in Chile.
This is particularly significant for Olympic Dam, with the historic mine enjoying a new lease on life after overcoming years of operational hurdles.
Olympic Dam produced 212,000 tonnes of copper in the 2022–23 financial year (FY23). This is a 54 per cent increase from FY22 (138,000 tonnes), a year when BHP conducted major smelter maintenance at the mine.
Spence, which forms part of BHP’s Pampa Norte operations in northern Chile, boosted its annual copper production to 240,000 tonnes, supported by increased throughput from the Spence concentrator.
Prominent Hill and Carrapateena produced 8000 tonnes and 12,000 tonnes of copper, respectively, across two months of production since BHP acquired the mines in its acquisition of OZ Minerals.
BHP has grouped Olympic Dam, Prominent Hill and Carrapateena together under the banner ‘Copper South Australia’, and the company hopes to produce between 310,000–340,000 tonnes of copper from the mines in FY24.
Integration activities saw small volumes of copper concentrate from Prominent Hill transported to Olympic Dam for processing.
WAIO continues to fire on all cylinders, producing a record 257 million tonnes of iron ore in FY23 – a 1 per cent increase from FY22.
“WAIO shipped record volumes on the back of productivity in its supply chain, rail network and car dumpers, while South Flank completed its deployment of autonomous haul trucks in May and is on track to ramp up to full production in the next 12 months,” BHP chief executive officer Mike Henry said.
BHP saw average prices for its copper, iron ore and metallurgical coal markets reduce year-on-year in FY23. Nickel prices remained stable, while thermal coal prices were higher, driven by a buoyant first six months.
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It has long been a trusted mining partner of countries across the world, but there is urgency for Australia to expand its downstream options as the world decarbonises.
Any new industry can present a race to the top, with early adopters best placed to capitalise on new market share and gain a competitive advantage.
This is the case in the context of decarbonisation, where more and more countries are recognising the commercial opportunities that come with establishing the net-zero power sources of a cleaner future.
The situation represents a once-in-a-generation opportunity, and Australia is beginning to understand the role it can play in supporting the green transformation.
Having established itself as a mining superpower, Australia is already a key supplier of the materials driving the world’s renewable energy technologies. But the country can be more than the world’s green-energy quarry, with opportunities to look further downstream and establish vertically integrated renewable industries onshore.
One avenue could be to develop a local battery supply chain, something the Future Battery Industries Cooperative Research Centre (FBICRC) sees as a particularly urgent commercial pathway.
“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.”
FBICRC released a report in March suggesting Australia’s battery opportunity could contribute $16.9 billion to the Australian economy by 2030.
The report, Charging Ahead – Australia’s Battery Powered Future, highlights Australia’s mining and geological upside, particularly in the production and endowment of critical minerals, and how this can support capabilities further downstream.
This not only encompasses battery manufacturing but other segments in the value chain, 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.”
Australia also has a significant advantage in refining, with the potential to be the world’s cheapest producer of lithium hydroxide monohydrate (LHM) through upstream integration in the supply chain. This is the result of Australia’s abundant lithium reserves and mining capacity, which creates natural synergies with downstream applications.
Some Australian companies are already harnessing onshore lithium hydroxide opportunities, with Mineral Resources (MinRes) and IGO producing the refined product from their downstream processing facilities in Kemerton and Kwinana, respectively.
The Kemerton plant sources spodumene concentrate – a raw lithium material – from the Greenbushes lithium mine in WA, which is part owned by MinRes’ Kemerton partner, Albemarle Corporation.
IGO’s Kwinana plant, which it owns in partnership with Tianqi Lithium Corporation, also sources spodumene from Greenbushes.
The lithium hydroxide produced from Kemerton and Kwinana is then shipped offshore for further processing before it is upgraded to active materials such as lithium-iron-phosphate (LFP) or nickel-cobalt-manganese (NCM) – two key cathode inputs for renewable batteries.
But demand for Australia’s upstream products is not solely coming from overseas, with a growing local renewable energy sector seeking more materials than ever.
“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 eight large-scale batteries to be built across the country, storing renewable energy and reducing the reliance on fossil-fuel power generation. Project locations extend from Victoria’s Surf Coast all the way up to Queensland’s tropical north.
Building independent capabilities is important, but for Australia to effectively harness its battery opportunity, it needs to tackle the matter holistically.
“Building an ecosystem is like trying to solve the chicken-and-egg problem,” O’Rourke said. “A healthy ecosystem needs multiple suppliers, customers and producers, supported by service companies, a flexible workforce, the research sector and government.
“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.”
FBICRC believes Australia can be competitive all the way from refining to manufacturing, but the country must find its sweet spot.
“We do not need to match China’s scale; rather we need to achieve minimum economic scale,” O’Rourke said. “Our minerals strength, our secure supply and our ESG (environmental, social and governance) credentials help sharpen our competitive edge.
“Australia has two cell manufacturing projects which meet this minimum scale: Recharge Industries’ 30-gigawatt-hour-per-annum project in Avalon (Victoria) and Energy Renaissance 5.3-gigawatt-hour-per-annum project in Tomago (New South Wales).
“The NRF (National Reconstruction Fund) and other support mechanisms can help Australia’s lighthouse projects get to scale and develop their supporting industries to build a competitive ecosystem.”
The Australian Government introduced the NRF in October 2022, contributing $15 billion to transform several future-facing industries, including renewable energy and downstream opportunities within the resources sector.
Federal support has also been flowing via the Critical Minerals Development Program, which recently provided close to $50 million in grants for emerging upstream and downstream projects.
This included $6.5 million of funding for Australian Strategic Materials’ Dubbo rare earths project in NSW, $4.7 million for International Graphite’s ‘mine-to-market’ graphite strategy in WA, and $4.6 million for IGO’s integrated precursor cathode active material (pCAM) facility in WA.
IGO is developing its downstream project in partnership with Andrew Forrest-backed Wyloo Metals, demonstrating the power of collaboration in Australia’s downstream ventures.
Collaboration is also a key part of FBICRC’s work and underpins its own pilot plant, is exploring the local production of NCM cathode materials.
“There is a strong collaborative spirit supporting our cathode precursor production pilot plant facility, where we are currently manufacturing high performance materials to world standard,” O’Rourke said.
“Four universities and 18 other businesses have come together to build and demonstrate an Australian manufacturing capability.”
Key mining industry players such as BHP, Allkem, IGO, Cobalt Blue, Lycopodium and BASF have come together with FBICRC to further Australia’s understanding of the active materials industry.
Australia’s battery opportunity is there for all to see, and there are enough developments to suggest that an integrated supply chain could be established.
But for it to happen, Australia must be firing on all cylinders, with stakeholders right across the battery supply chain working together to make this dream a reality.
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