Battery metal companies and investors flocked to the Westin Hotel on Perth CBD’s eastern fringes yesterday for the annual Technology and Low Emission Minerals Conference, now in its 15th year.
The running theme for the event’s first day was the state’s potential to become a global centre for battery minerals supply and processing, buttressed by its vast mineral resources, advanced mining practices and a proactive state government.
Both the Association of Mining and Exploration Companies (AMEC) and the WA Chamber of Commerce and Industry have produced reports outlining the business case and necessary steps required for Western Australia to benefit from the exponential global growth projected in battery metals required for electric vehicles and components.
With proven reserves in all minerals requiring battery components, strong growth in greenfields exploration and a number of advanced near-development projects, WA can leverage its unique advantage to potentially capture a substantial share in the expanding global appetite for batteries and battery-related products.
READ: Technology and Low Emission Minerals Conference to showcase emerging Australian battery metals industry
A mixture of battery metal-focused companies gave presentations, including lithium developers ioneer Ltd (ASX:INR) and Venture Minerals Ltd (ASX:VMS), as well as graphite companies Comet Resources Ltd (ASX:CRL) and Hexagon Resources Ltd (ASX:HXG).
Manganese was represented by Element 25 Ltd (ASX:E25) and advanced uranium developer Bannerman Resources Ltd (ASX:BMN) gave a feature presentation on the uranium market and the company’s Etango project in Namibia.
Perth a potential 'new energy hub'
Keynote speaker the Hon Bill Johnston MLA, WA Minister for Mines and Petroleum, told the conference that Western Australia, with its abundance of battery metals and technological know-how, can take advantage of future opportunities in emerging battery-related industries.
Johnston said: “One part of that is our ethical business practices.
“When we market WA products to the world and Perth is a new energy hub, people can see that we are a sustainable resource jurisdiction.”
He remarked on the growing confidence in the resource sector, particularly for battery metals, which had led to an upswing in exploration over the last 12 months.
World-class resources to match growing demand
Along with a focus on best practice, Western Australia has low sovereign risk and world-class resources, with three of the four best hard-rock lithium projects in the world.
The state is the world’s leading producer of lithium – 44% of world supply in 2017 came from WA’s seven operating lithium mines.
All other minerals used in battery components are mined, including globally significant nickel resources across 87 deposits and eight operational mines.
WA is also the world’s second largest cobalt producer, with demand increases sparking exploration in the cobalt space.
Johnston highlighted that 40% of global cobalt supply was going into batteries and that was expected to increase to 55% in 2019.
Established industrial centres and excellent infrastructure further add to the state’s advantage in leveraging a boom in battery metals.
Capturing share of global value chain
AMEC said in its report 'The Path Forward: Supporting the development of a lithium and battery metals industry in Western Australia' that WA mines significant quantities of global lithium resources and produces all other minerals necessary to domestically manufacture batteries.
Spodumene mined in WA has a lower conversion cost to lithium hydroxide when compared to brine evaporated in other regions, giving Australia a comparative advantage in technology and industries not heavily reliant on low labour costs.
The report points out that the current $165-billion global lithium value chain will grow to a conservatively estimated $2 trillion by 2025.
Australia will capture $10 billion of this without government and industry collaboration, however, a concerted effort to add one step of electro-chemical processing to the value chain would give Australia a further share of $297 billion.
AMEC's research showed that 89% of global electro-chemical processing occurs in China but that Australia could compete on both cost and quality of product.
Along with graphite, vanadium, magnesium, rare earths and other minerals associated with clean energy and battery components, WA also holds an advantage with resources in manganese.
Johnston said he expected to see further growth in the global manganese market, noting that world demand had doubled in the last decade, partly due to demand in battery technologies.
The Woodie Woodie mine in WA’s north is Australia’s only manganese mine and companies such as Element 25 are evaluating their projects to source high-grade manganese dioxide.
Moore Stephens' report 'Manganese: Is it the Forgotten Battery Mineral?' notes that by 2040, 55% of all new car sales and 33% of global fleet are expected to be electric.
New electric car sales are currently at 1.3% and global fleet about 0.2%.
The report highlights manganese's importance in current preferred battery cathode compositions that utilise manganese, cobalt and aluminium, with manganese being the cheapest to mine and produce.
Although only 10% of the global manganese market by volume, high-purity manganese makes up about 40% of global market value.
Perth-based Element 25 is advancing multiple work streams towards the completion of a pre-feasibility study (PFS) at its Butcherbird high-purity manganese project.
The PFS is assessing the path to commercialising Element's manganese resource following strong scoping study results and growth forecasts in high-purity manganese markets.
Element intends to mine and process high-purity products including manganese sulphate for lithium ion batteries and electrolytic manganese metal.
Butcherbird infrastructure overview.
Lithium still leading WA battery minerals
Since 2017, investment in lithium mining and downstream processing in WA has seen projects worth $4 billion completed, under construction or planned.
This includes the Tianqi lithium plant nearing completion in Kwinana’s industrial area, which will be the largest lithium hydroxide plant in the world.
Argonaut Limited director of metals, mining & energy research Matthew Keane provided the conference with a market update, stating that battery metals had all sold down heavily in the second half of 2018.
Keane said: “In terms of small resources, it’s been a very challenging half-year.
“The impact of trade wars, the US dollar strengthening, it has had a large impact.”
Despite the price sell-down, Keane said the next wave of lithium projects was approaching, along with a number of Western Australian companies expanding their production.
He also listed Mineral Resources Limited’s (ASX:MIN) spodumene concentrate expansion to 750,000 tonnes and Kidman Resources Ltd’s (ASX:KDR) Mt Holland joint venture which has increased production to 315,000 tonnes spodumene concentrate and 45,000 tonnes lithium hydroxide.
Speaking to Proactive Investors, Vertical Events manager for resources Doug Bowie said that lithium was still the most common commodity of the conference, along with increases in graphite, vanadium and uranium companies.
With battery metal stocks having been tempered in the last six months, Bowie speculated that there is strong potential for markets to substantially improve over the next 6-12 months.
Battery mineral predictions
Making a prediction on the future of battery metals, Keane said that we are on the cusp of an electric vehicle minerals boom and the uptake of disruptive technology was exponential not linear.
Keane said that medium-term lithium prices were likely to move closer to US$10,000 per tonne of lithium carbonate before returning up to US$20,000 per tonne.
He said we will see more active upstream investment from the US and Europe as electric vehicle manufacturers compete with China, as well as increasingly focusing on supply chains outside of China.
As markets balance, Keane expects to see a higher focus on quality, potentially moving from direct shipping ore (DSO) operations to those producing high-purity concentrates.
Cobalt will remain critical for charge-discharge moderation in lithium-ion batteries and will attract premium pricing for non-African supply.
Battery demand for nickel will move towards 15-20% of the total nickel market by 2025, accelerated by advancements in refining and processing nickel sulphates.
Looking at industry growth and demand projections, Keane echoed Johnston’s comments by saying that WA was rapidly becoming a global centre for battery minerals supply.