17 Jun, 2021
Australian miners' electrification drive to fuel battery storage tech
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| The pilot plant in Perth, Australia, to test BHP's nickel products for the battery market. |
The mining industry's ambitious net-zero emissions agenda is helping support an economic opportunity for Australia to go beyond mining metals to producing the battery storage technology to support the industry's electrification needs, according to a forthcoming report by Accenture.
The report, set to be released June 24 by Future Battery Industries CRC, a collaborative research center between industry, government and universities, will confirm the substantial economic opportunity in the mining, refining, and chemicals processing stages for critical battery materials, CEO Stedman Ellis told S&P Global Market Intelligence.
Australia is the world's largest producer of the lithium used in lithium-ion batteries, the dominant technology for batteries used in electric vehicles and in power storage for grid applications. Australian miners' "ambitious" zero-emissions announcements requiring large-scale electrification are helping to generate domestic demand for storage solutions at the same time that energy companies across Australia are making substantial additions of grid-scale batteries, Ellis said.
Investments in Western Australia by majors like Albemarle Corp., Tianqi Lithium Corp., Wesfarmers Ltd. and Sociedad Química y Minera de Chile SA in refining mined spodumene into lithium hydroxide are targeted for the electric-vehicle market, as is BHP Group's operations refining nickel sulfate. These investments "put Australia on the cusp" of reproducing the present generation of battery chemistries used in the EV market from locally sourced materials, Ellis said.
Electrifying the mines
In addition, the Accenture report will also highlight the opportunities associated with the growing demand for battery storage, both on-grid and off. Mining, Australia's largest sector by share of total national GDP at 10.4%, is under pressure to clean up its operations and lower its carbon emissions footprints.
The electrification of the mining sector will require large investments in off-grid storage at remote mining sites using renewable energy like solar and wind.
This provides the opportunity for Australia to move further into the battery value chain and develop capacities in pack assembly, manufacturing of cells that go into battery packs, and battery recycling and repurposing, according to the report, which suggests that Australia could become internationally competitive as this market grows.
"Cell manufacture will be more challenging, but is a highly automated process requiring highly skilled labor, and compared to [Organisation for Economic Co-operation and Development] averages, Australia is not out of the game in terms of skill costs," Ellis said.
There are already some Australian companies working on battery pack assembly, management systems and standalone power systems, albeit using imported cells, Ellis said. This could be a springboard to look at moving into battery-cell production in the medium term on the back of the module and pack assembly industry.
On-grid and off
Benchmark Mineral Intelligence analyst Caspar Rawles said in an email interview that developing a battery supply chain in Australia "makes sense" based on its mineral wealth and its lithium production.
BHP's battery-grade nickel sulfate test plant in Perth, Australia, is being repurposed into a pilot plant for the production of cathode precursor material that goes into EV batteries, a project supported by Future Battery Industries.
Less likely is the prospect of Australia producing battery packs for EVs, as they tend to be produced by the automaker close to the site of vehicle production, which Australia currently does not do. However, "with the new formation of the EV and energy storage value chains, things are changing rapidly," Rawles said.
The manufacture of battery cells for the EV market, meanwhile, is already a large established sector dominated by China, Japan and South Korea. But the market for energy storage for power utilities and for off-grid applications, such as mining, is forecast to be the fastest-growing segment of the global battery market over the next decade.
Financing interest
Mark Gresswell, director of Australian research group Commodity Insights, told Market Intelligence that large international downstream companies, seeing supply shortages for battery minerals in the next decade, are trying to secure off-take from projects that have not even been financed yet, and could help finance them.
Automakers and battery makers are increasingly integrating upstream within the EV supply chain by investing or buying directly from miners to ensure raw-material supply security in meeting car and battery expansion plans, Market Intelligence senior metals analyst Alice Yu said in an email interview.
The Accenture report will also cite the recycling and reuse of batteries as a potential economic opportunity, as Australian mine electrification proceeds and as other renewable energy and storage applications mature.