Australian Lithium Industry Optimising the Integrated Value Chain EXPOMIN 2018 15th International Congress Lithium: Market and Technologies Ric Gros Chief Executive Officer METS Ignited Australia Ltd
METS Ignited is one of six industry growth centres which are front and centre of the Australian Government Innovation Policy Objectives: Accelerate commercialisation of innovation Increase industry capabilities Drive export growth Develop the workforce of the future Identify opportunities for regulatory reform Close consultation with industry informed the Sector Competitiveness Plan 6000+ conversations 10,994km travelled 6 states 12 workshops 5one on0one's
The GVA of the METS sector has grown substantially over the last decade and leveraged the construction boom The Australian METS sector, Gross Value Added, 2005-06 to 2014-15, $ billions, current prices 128 Specialised Non-specialised 44 49 23 26 21 23 61 30 30 82 38 44 72 37 35 96 48 48 66 62 109 100 57 51 52 49 86 43 43 Total growth 2005-06 to 2014-15, % 87% 102% 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 SOURCE: ABS, Team analysis
The Megatrends driving a global opportunity Megatrend Sustainability CO 2 Reduction Electrification of Mobility Knowledge / Innovation Curve Green Energy Storage Industry 4.0 Remote Operations Storage Storage HH Devices Storage
Battery markets and the future Li-ion battery Characteristics The Li-ion market was less than 6 GWh 10 years ago; in 2016, this market is estimated to have surpassed 70 GWh Roskill are currently forecasting average annual battery market growth of 14 per cent per year out to 2025, when the market is expected to reach 223 GWh. Li-ion battery demand has created a boom for key input commodities lithium, graphite and cobolt, resulting in rising demand, prices spikes, and increased investment activity
Battery markets have some emerging issues, which could impact future trends... With forecast demand growth, battery markets are skewed with China becoming increasingly dominant. World lithium production China is the largest producer of flake and spherical graphite, lithium-ion anode and lithium-ion batteries. China is constructing several Li-ion factories, pushing the country s share of Li-ion battery production to more than 60 per cent by 2020. It is not yet clear yet how far Australia can progress beyond mining and into other parts of the battery supply chain. Top five lithium mine reserves Lithium concentrates produced from mineral mines need to be processed into higher purity lithium products before they can be used in batteries.
Other key drivers Graphite and Cobolt China currently dominates graphite production The estimated world total graphite reserve is 230 million tonnes New graphite deposits are emerging at various sites around the world, including Madagascar, Mozambique, Namibia, and Tanzania. The global graphite market is expected to lift from just under $14 billion in 2013 to almost $18 billion by 2020. Top five graphite mine reserves..australia has modest deposits of graphite Cobalt prices experiencing continued volatility Refined cobalt supply is expected to fall below consumption, as a result of Li-ion batteries and aerospace industries albiet offset by a shift towards battery technologies requiring less cobalt. Cobalt demand expected to grow at annual rate of 4% in the next 3 years, with primary source from mines in the DRC. China is the world s leading producer of refined cobalt, owning 70 per cent of global refinery capacity. A deficit of 7,000 tonnes of cobalt is expected by 2020 Top five cobolt mine reserves
Production costs for Li-ion batteries is in decline The price of lithium-ion batteries in 2016 was $273/kWh a drop of 73% since 2010. The steep decrease in prices due to technology improvements and economies of scale. Fierce competition between the major manufacturers has been instrumental in bringing down prices. Up-swing in Li-ion battery sales for passenger EVs, but installed capacity is still much larger. Passenger EV sales were lower than forecast from 2011 to H1 2015 and production capacity well ahead of demand. Increase in passenger EV sales over 2016/17, has resulted in quarterly battery demand of more than 6GWh, with sales dominated by Panasonic, linked to Tesla Motors. In 2016, new EV sales consumed over 20 GWh, while installed capacity was five times this size. Demand for batteries from electric buses far outstripped that of other passenger vehicles in 2016.
Battery Prices are expected to continue to fall BNEF forecasts indicate lithium-ion battery pack prices could fall to as low as $73/kWh Intense price competition is leading manufacturers to develop new chemistries and improved processes to reduce production costs. Forecast suggest a battery in a Korean manufacturing plant in 2017 costs $162/kWh, dropping to $74/kWh in 2030. The BNEF battery price survey provides an annual industry average battery price for EVs and stationary storage. The learning rate (the price decrease for every doubling of capacity) is 19%. Source: Bloomberg New Energy Finance
Passenger EV forecasts continued growth, driving the Li-ion market BNEF forecasts annual demand for lithium-ion batteries from new EV sales of 408GWh in 2025 and 1,293GWh in 2030 Demand from EVs, stationary-storage market forecast at 65GWh in 2025. Source: Bloomberg New Energy Finance BNEF forecasts behind the-meter stationary storage alone will top 200GWh in 2030. Batteries are the primary reason why passenger EVs are more expensive than ICEs today Source: Bloomberg New Energy Finance
Production Capacity is exploding around the world BNEF forecast an additional 154GWh of capacity to be built over the next five years, bringing global capacity to 273GWh by 2021 Li-ion Battery Manufacturing Asset Map Battery manufacturers agree with BNFE growth projections driven by demand from EVs and stationary storage Shift in capital from battery companies to build new capacity, driving increased sales and a reduction in battery prices. Source: Bloomberg New Energy Finance
Research hints a Beyond Lithium Technology For EV Battery Improvements (Panasonic) and Toyota is also exploring other options According to a recent article in the Nikkei Asian Review, battery research has seen a big shift in recent years. At one time, nearly half of the presentations at the Battery Symposium in Japan were about fuel cells and Li-ion battery cathode materials. Since 2012, these topics have been replaced by themes of solid-state, lithium-air and non-lithium batteries. Lithium-ion chemistries have a maximum energy density, dictated by the laws of physics, and today s batteries are not to far from theoretical maximum. Toyota is focusing on solid-state and Li-air batteries targeting EV to go 500 km on a single charge Seeking rechargeable batteries that can generate 800 to 1,000 watt-hours per liter. That would double to triple energy density of today s best Li-ion batteries.
Lithium supply response has reacted to demand position The majority of global Lithium reserves are brine deposits, however the nature of spodumene deposits enable more rapid capacity additions. Australian lithium projects Australia is expected to dominate the front of the lithium value chain for the foreseeable future, with projects at Greenbushes, Mt Cattlin, Mt Marion and Pilgangoora all ramping up production.
However both production methods face technology challenges driving extraction and processing improvements Capital intensity is comparable when downstream conversion factors are taken into consideration. Operating costs at Brine production are lower than Spodumene when converting to Lithium Carbonate Environmental concerns coupled with the resource chemistries provide incentives for new extraction and processing technologies Spodomene processing / conversion technologies brine deposits extraction and water technologies lengthy evaporation pond cycles Processing technologies solvent extraction, ion-exchange, selective crystallisation Measuring equipment, logistics and management services Greenbushes Mine WA (AFR)
Value add from integrated industry development Now is the time to act for Government, industry and academia as part of general efforts to provide value added to the industry Focus on technology and innovation opportunities to optimize the value chain Lithium Value Chain USD Million - 2025 Source: AMEC, 2018
A METS Ignited initiative Promoting a prospective CRC for a new Australian energy industry Identify new industry and business opportunities includes connecting, leveraging, facilitating business cases & seeking sources of funding & investment...
Regional Cluster Development Case Study Western Australia Strategic positioning in value chain participation Shift to producing battery grade mineral production Developing the Lithium Valley concept: Perth or the Kwinana to lead expertise in cathode metals. Kwinana - a downstream processor of lithium. Tianqi - roaster capacity to create lithium hydroxide operation expansion Greenbushes lithium and tantalum mine to build a lithium processing plant adjacent to Tianqi Esperance to establish a nickel sulphate product for the battery minerals market.
Innovation is more critical than ever before Knowledge Doubling Curve Year Time to Double Knowledge 1900 100 years 1950 25 years 2014 13 months The Age of IoT 12 hours Driving Industry Knowledge Priorities Industry Knowledge Priorities are those outcome-focussed bodies of information or skills that need to be developed to create sustainable global competitive advantage for the Australian METS sector.
Chile & Australia Opportunities for Strategic Collaboration National Strategy Cluster Development Collaboration Industry and Research
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