Allison Britt offers a simple analogy to explain the opportunity at the foot of Australia.
“If you want to compare an EV battery to cooking, we have all the ingredients to make a delicious cake in our pantry,” said Ms Britt, director of Geoscience Australia.
“And the challenge for Australia…is ‘Do we want to continue doing what we’ve been doing…selling some of those ingredients to bakers overseas, or do we want to take the next step?’
“‘Maybe make the cake batter here in Australia and then send it off to cook, or do we want to go all out and invest in a new oven and make and bake the cake ourselves here in Australia?’
“That’s where we are with the battery situation right now.”
Around the world, the adoption of electric vehicles, or EVs, is accelerating as automakers and consumers embrace the technology and governments seek to decarbonize transportation.
In Europe, sales of electric vehicles have surpassed diesel vehicles, a situation that seemed unthinkable a few years ago.
Electric vehicles accounted for 20 percent of sales in Europe in 2021, 15 percent in China and 5 percent in the US, with big jumps expected again this year, according to Bloomberg.
The trend has even seen automakers invest directly in mining companies to bolster their access to essential battery minerals.
This latest vehicle transition is shaping up to be the biggest change in personal transportation since the internal combustion engine replaced the horse-drawn carriage.
The key question is: Will Australia use its advantage in natural resources to become a superpower in the electric vehicle revolution?
‘Amazing natural endowment’
Australia is definitely at the head of the pack when it comes to mineral endowment, according to Ms Britt.
While lithium is the best known of the critical minerals, lending its name to the high-performance batteries typical for electric vehicles, a host of other materials are also required.
These include nickel, cobalt, manganese, vanadium, zinc and copper, all of which are found in abundance in Australia.
“We’re very lucky … we have the most amazing natural endowment of all these battery minerals,” he said.
“In fact, when it comes to world rankings, we are in the top 10 for all of them.
“And for most of them, we’re even in the top three.”
Australia’s miners have wasted little time capitalizing on the EV transition, which is fueling huge demand for the minerals used in the batteries needed to power the transition.
From exploration minnows to the world’s largest diversified miner, BHP, everyone is looking for a piece of the action.
Commodity giant Glencore is in the thick of the action, operating battery ore mines across the country.
At its Murrin Murrin mine, some 800km northeast of Perth in Western Australia’s Goldfields, the Swiss-Anglophone company is producing nickel and cobalt to help meet demand from carmakers.
The mine’s cobalt output alone accounts for about 5 percent of the world’s supply, which is dominated by the Democratic Republic of the Congo despite concerns about worker safety and environmental standards.
Demand is expected to soar
Glencore Nickel VP Jason Cooke says demand for battery minerals appears to be going in one direction.
“By 2050, we see nickel and cobalt demand quadrupling from today and we also see copper and zinc supply needs doubling by 2050,” Cooke said.
“So basically we see strong demand for all those minerals going forward.”
According to Cooke, large investments will be needed to ensure that supply can keep pace with the ever-increasing use of battery minerals.
Although he said there were no specific plans, he confirmed that Glencore was looking at ways to boost supply through improvements to its existing operations or the possible acquisition of new ones.
“We are interested in further expanding our presence in the mineral markets,” he said.
“We are always looking for opportunities, new opportunities but also opportunities for our existing operations.”
Along with battery minerals, electric vehicles are also driving demand for other resources, such as rare earths.
In a bid to meet growing demand, rare earth mining company Lynas Corporation is spending more than $1 billion to expand its presence in Australia.
On the outskirts of the historic mining town of Kalgoorlie, WA, the ASX-listed company is building a new cracking and leaching plant to help manage waste that is no longer wanted in Malaysia, where Lynas has its processing operations.
Added to this is a $500m investment the company recently announced for its Mount Weld mine near Laverton, some 950km northeast of Perth.
Large investments are needed
Lynas CEO Amanda Lacaze says that although rare earths are not used directly in batteries, they are used in much higher amounts in electric vehicles compared to conventional cars.
“You might have a couple of kilos in an ICE (internal combustion engine) vehicle,” Lacaze said.
“In a really option-equipped electric vehicle, you might have four to five kilos of rare earths in that vehicle.”
Until recently, the electric vehicle industry made up only a relatively small part of Lynas’ business, but Lacaze said it was now expected to become a major customer.
And he expected outsized demand for Australia’s output of the minerals needed for the switch to electric vehicles, arguing that its reputation as a stable and democratic supplier would be a huge advantage in an era of growing geopolitical unrest.
“There are various forecasts on how fast the market will grow,” Lacaze said.
“In the industry, we normally talk about it doubling by 2030. Some of the outside commentators throw up numbers like three or five times.
“What is certain is that it is growing fast and it is growing sooner than most of us forecast.”
Such is the growth of the industry that electric vehicle producers from around the world have been knocking on Australia’s door in search of secure supplies of raw materials.
Last year, leading electric vehicle maker Tesla struck deals with miners ranging in size, from behemoths like BHP to small players, including Liontown Resources, which is developing a lithium mine in WA and also signed a deal with Ford.
Race for raw materials
For David Southam, the outgoing boss of nickel miner Mincor, the competition for supplies is having dramatic implications.
“To the point where automakers invest in mining companies,” Southam said.
“Normally, they are many steps away from obtaining the raw material. But there is a race for those raw materials.”
“You’ve seen Ford Motor Company, for example, invest in Liontown and provide debt financing for a lithium development company.
“You would never see Ford investing in mining companies before. So there has been a real learning curve… they are moving forward to secure those supplies.”
“That’s a fundamental change.”
Shannon O’Rourke, director of the Future Battery Industries Cooperative Research Center in Perth, said there was understandable buzz surrounding Australia’s battery minerals industry.
Australia, he said, currently accounts for around 50 per cent “of the total amount of minerals needed for the battery value chain”.
“Australia is uniquely positioned in this space,” O’Rourke said.
“No other country has the same resources that Australia has. No other country has the same amount of production as we do.
“We really are a minerals powerhouse.”
Despite this, Mr O’Rourke said it was vital for Australia not to lose sight of the opportunities available to countries that could not only extract the raw materials but, more importantly, add value to them.
He said the economic and strategic returns available to jurisdictions that could partially or fully produce batteries for electric vehicles were orders of magnitude higher than those available to miners.
Time is running out to add value
Unlike other raw materials such as wheat or iron ore, O’Rourke said battery minerals could be turned into “very high-value products” in the first stage of processing.
“We believe time is running out for Australia to play a leadership role in the battery value chain,” he said.
“By 2030, we expect there to be a lot of consolidation in the industry.
“There is a lot of competition from international countries looking to capture this value for themselves.
“And it really is a race: Australia needs to move fast and decisively to capture this value in the industry.”
Ms. Britt from Geoscience Australia echoed these comments.
“We have a huge mineral endowment and ongoing geological potential for wonderful new discoveries,” he said.
“We have some companies that are taking the next step in the supply chain and adding value by making battery precursor materials.
“And then we have this tantalizing potential to develop our own domestic EV battery manufacturing sector right here in Australia in the next few years.”
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