Australia is finally waking up to the economic potential of its in-ground high technology elements, with the launch of the Lithium Valley report in Western Australia, by Regional Development Australia – a partnership between the Australian, state and territory and local governments. This report looks beyond the domestic extraction of lithium-rich ores, supporting value-added processing and manufacturing in Australia, to produce chemicals and components required for lithium batteries, for which global demand is growing exponentially.
But we need a new vision that stretches further, beyond lithium, to realise our full potential in high-tech materials markets and secure Australia’s future. Geoscience Australia estimates that in 2016-17, Australian mineral exports, dominated by iron ore, coal, gold, copper, and alumina/aluminium, had a value of A$173.6billion (excluding oil and gas), representing around half the annual value of total Australian exports. This figure could be massively increased by processing our raw resources on which advanced technologies depend, adding value and creating new industries and jobs for sustained economic security.
The world loves lithium
Lithium is the celebrity element capturing media attention worldwide, as global companies scramble to secure long-term supplies, buying up Australia’s raw resources, while most of the downstream benefits are derived and enjoyed elsewhere.
Demand for lithium is being driven by demand for solar/wind energy storage batteries, mobile phones and tablets, and medical devices powered by lithium batteries. In addition, exponential demand for electric vehicles could increase global demand for lithium – and other elements needed for electric vehicles – by at least 10 times by 2025. This has sparked a ‘lithium rush’ to develop lithium-rich spodumene mining projects in Western Australia, backed by foreign companies intent on securing strategic, long-term supply.
In the Lithium Valley report, Infranomics estimates that Australia captures just 0.5% (A$1.1billion) of the total lithium value chain by simply processing ores, while Australia’s trading partners enjoy the remaining 99.5% (A$213 billion) by providing electrochemical processing, battery cell production, and product assembly.
Other elements are essential too, as China knows
Although Lithium hogs the spotlight, cobalt, vanadium, and copper are also attracting attention. Critical rare earths – essential to many advanced technologies and able to extend lithium battery range by delivering EV motors with outstanding efficiency – are being oddly and precariously overlooked, creating potential for devastating supply disruption. Disruption to the supply of rare earths and equally critical zirconium materials will be inevitable if China’s stranglehold on global supply (90%+) continues.
Made in China 2025 is a long-term government policy to promote development of China’s high-technology industries through subsidies and infrastructure investment. This national policy has attracted leading global companies to undertake their R&D and manufacturing in China, creating Chinese jobs and wealth. Soon, China’s industries will consume all the high-tech elements mined domestically, leaving no raw resources available for export, forcing international consumers to pay premium prices for finished Chinese products.
Dig it, process it, use it and ship it
The ‘dig it and ship it’ mentality of the old Australian economy must change. We’re still a lucky country, with most of the critical high-tech elements available in large reserves at multiple sites across the country, numerous operating mines and many new mines under development. But we must stop relying on luck (and mining) alone and take a smart step forwards with a ‘Made in Australia 2030’ vision to: add value to our raw resources, stop the ‘brain drain’ from our research organisations, take a leading role in the development of advanced technologies, grow new industries to sustain employment, and reduce our reliance on imported, finished products.
Alkane’s Dubbo Project is an important alternative to Chinese supply, processing 18 high-tech elements, including zirconium, hafnium, rare earths and niobium. It has long-term potential to reduce the threat of Chinese dominance to Australian and international security, providing a strategic opportunity to produce downstream value-added materials, devices, and products in Australia and allied countries.