Setting the benchmark for battery materials
While Australian cities were brought to a standstill on Friday by climate change protests, at the same time in Perth over 100 delegates attended the Perth leg of the Benchmark World Tour, an annual global roadshow bringing together market analysts, battery materials producers, research bodies, media and sector investors for a travelling one-day snapshot of the battery materials sector.
Presenting to a room full of participants who believe climate change is real and change is required to adapt to an electrified, low emissions economy, delegates heard from sector experts in lithium, cobalt, graphite and battery technologies.
The lithium sector has come under a fair degree of pressure over the past year, with price falls largely reflecting short term delays in chemical conversion developments in China. This market negativity seems to betray the underlying investments that are being made in the battery sector globally, with all indications of a robust future.
The snapshot overwhelmingly cemented the view that the future is electric and that there is huge value to be created by Australian companies over the next decade.
At the macro level, demand for raw inputs such as cobalt, nickel, lithium and graphite are all seen as strong with significant downstream investment in battery cell manufacturing already underway. As a guide, Caspar Rowles from Benchmark Mineral Intelligence noted that while there was 293TWh of battery production underway in 2018, this number is expected to increase to 2,027TWh by 2028.
This requires significant new production of raw commodities to move to reality. Rowles talked about a 3x increase in cobalt requirement, 8x lithium increase, 8x graphite increase and 13x for nickel over the decade between 2018 and 2028.
At the Australian project level, presentations on high purity alumina developments by FYI Resources, vanadium by Vince Algar from Australian Vanadium and Pilbara Minerals’ decision to moderate production gave an insight into some of the exciting developments and challenges that these projects pose.
The afternoon session shifted downstream and discussed the emergence of Kwinana (aka ‘lithium valley’ or ‘battery alley’) as the emerging supercentre for future developments. With a number of projects setting up in the industrial park with access to power, port, chemical inputs and people, there was a view that this had the potential to be a ‘highly strategic asset’ worthy of Australian Government protection.
With the Future Battery Industries CRC recently kicking off its 6-year $135 million program, several of the presentations discussed the potential for Australia to move even further downstream into the battery production part of the supply chain.The general consensus was that while it was unlikely that we are going to see a battery megafactory being developed locally, there was more potential for specialised niche batteries being manufactured here for use in defence, remote areas or the mining sector.
The overarching theme of the conference was there are exciting times ahead for the battery materials sector and there are lots of opportunities for investors to take a position before the expected resumption in price confidence.