Australia needs to make key decisions about the future of its lithium sector in the coming months to capitalise on the huge economic potential, according to the Australian Government’s chief economist Mark Cully.
The emerging industry has the opportunity to earn hundreds of billions of dollars and create thousands of jobs in the country, the Chief Economist’s Office today reported in its latest Resource and Energy Quarterly.
Cully highlights the rapid growth of the lithium industry in Australia in the report, most recently headlined by the start-up of Pilbara Minerals and Altura Mining’s projects at Pilgangoora in the Pilbara, Western Australia.
The expected rise in output from this growth would leave Australia accounting for almost 80 per cent of global supply from hard rock deposits, Cully explained.
Global lithium demand is expected to rise from 149,000 tonnes lithium carbonate equivalent (LCE) to 1.3Mt LCE in 2027, with 90 per cent of growth driven by electric vehicles (EV).
Cully believes Australia has strong potential to move to the centre of the global lithium supply chain given its geological advantage.
However, he said the core question at the moment was whether Australia could become a destination for high-grade lithium refining.
“Various factors will need to be considered, such as site pre-approvals, research and development, and access to skilled workers,” Cully said in the report’s special feature on lithium.
“Given the pace of change and efforts now under way to solidify the supply chain, it is likely that key decisions around the future of lithium in Australia will need to be made within the next few months.
“Countries which capitalise on the opportunities of the emerging global lithium market could earn hundreds of billions of dollars in coming decades, and could play a pivotal role in fostering a new wave of clean energy technology around the world.”
Australia’s growth in new mines has been supported by investment in beneficiation, with five plants now planned or under construction in Western Australia.
This combination of investment in lithium has led to a spike in employment in Western Australia that is on track to continue.
“The number of full-time workers on lithium projects in Western Australia has increased from 399 in December 2014 to more than 2600, with thousands more to come,” Cully said.
Prime Minister Scott Morrison and Resources Minister Matt Canavan are in Perth today to discuss Australia’s lithium opportunity with the state’s industry representatives.
Association of Mining and Exploration Companies (AMEC) chief executive Warren Pearce said he would be asking for strong leadership from the government to grasp the battery minerals opportunity.
“Over $3 billion is committed to the development of lithium mines and there are five refineries in construction. The question is how far down the battery mineral chain will Australia choose to go?” Pearce said.
“As the quarterly identifies government choices and policy will play an important role in the immediate future, the Chief Economist’s Office suggests action is needed in the coming months. Otherwise, Australia risks missing out on the opportunity to value add to our own minerals.”