viewLithium Australia NL

Lithium Australia says Australia should have more influence on global supply chains for critical raw materials

Countries emerging as markets for CRMs are rapidly setting policy frameworks to widen their choice of supply away from China’s mining and processing dominance.

Lithium Australia NL - Lithium Australia raises concerns about critical raw materials and Australia’s influence
CRMs are essential for transitioning to low-carbon energy

Lithium Australia NL (ASX:LIT) has urged Australia to take advantage of its natural wealth in critical raw materials (CRMs) by stepping up its influence on global supply chains for these in-demand commodities.

Although the company acknowledges last week’s Federal Government initiatives to deploy wider access to funding for domestic CRM players, Lithium Australia believes that these measures ignore a fundamental need – more grassroots support for research and development.

LIT's managing director Adrian Griffin said Australia had the resources and potential to become globally competitive in the CRM domain, however, the Federal Government’s Critical Minerals Strategy would need to be strengthened by providing more R&D funding for local companies involved with these materials.

“Enhanced R&D could fully optimise upside”

“Doing so would place Australia at the forefront in terms of processing the CRMs we supply, as well as help integrate sustainability measures that align with the ethical, social and governance standards the global community expects.

“Enhanced R&D could fully optimise the upside in Australia’s primary CRM extraction, as well as promote new processing technology.

“We need to dovetail with, rather than remain outside, emerging global markets," he said.

The MD said, “While Australia still lacks an effective CRM policy, we can transform the ‘critical’ in CRMs by implementing supply-chain control beyond the primary extraction of the materials themselves.

“Australia should aim not only to supply the CRMs vital for a cleaner planet but to implement supply-chain reforms before the major economic powers implement policies that may not align well with Australia’s CRM interests.”

Government CRM initiatives

Griffin continued: “And while supplying CRMs is a great financial opportunity for Australia, it should not end there.

“Environmental responsibility dictates the implementation through recycling of ethical, sustainable methods for extending the lifecycle of CRMs, presently finite assets.”

The latest government CRM initiatives include opening a dedicated project-facilitation office within the Department of Industry from January 2020, ensuring that CRM projects can access financial support through Export Finance Australia and the Northern Australia Infrastructure Facility, and committing A$4.5 million for Federal scientific agencies to fund new CRM research.

US and EU CRM lists

Griffin added that a stepped-up Australian role in global CRM supply chains would also protect our CRM growth trajectory from ongoing vagaries in the global CRM market.

“In terms of the strategic importance of CRMs, both the European Union and the United States have developed and regularly update their lists of materials, but each differs on what, and why, they classify some as ‘critical’.

“Generally, CRMs are classified not as a result of their scarcity but because of their significant economic importance for key sectors of an economy, including consumer electronics, environmental technologies and the automotive, aerospace, defence, health and steel industries.

“The content of US and EU CRM lists are also influenced by how each jurisdiction views supply risk in terms of dependence on imports, by the fact that some CRMs are found in the highest concentrations in less favourable locations, and by a lack of viable substitutes.

“Currently, the EU does not regard lithium as critical, since no industries there actually require it.

“Although several European battery plants are in the pipeline, none are yet up and running, so supply is not an issue.

“Presumably, though, that is about to change.”

Quick facts: Lithium Australia NL

Price: 0.048 AUD

Market: ASX
Market Cap: $29.06 m

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