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CEFC invests in lithium mine to help make Australia storage powerhouse

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The Clean Energy Finance Corporation has made its first investment at the start of the supply chain for the clean energy economy with a $20 million contribution to a new lithium-tantalum mining project in Western Australia.

The $US15 million investment is being made as part of a $US100 million secured bond issued by an offshoot of Pilbara Minerals, an ASX-listed company that hopes to extract lithium and supply the market for lithium-ion battery storage products for electricity and electric vehicles.

CEFC chief executive Ian Learmonth says the investment is the first of the kind for the CEFC, and is an example of how the CEFC can support the development of a strong supply chain to further enable Australia’s – and the world’s – transition to a low carbon economy.

“Lithium is an essential part of the clean energy transition, particularly as we develop enhanced battery storage technologies that will allow us to increase the use of renewable energy, both for large- scale and small-scale projects,” he said in a statement.

“The lithium concentrate supplies to be produced by this project will help build Australia’s capacity to supply much needed resources for the clean energy technologies that are set to play a vital role in increasing the use of renewables in our future energy mix.”

The Pilgangoora lithium-tantalum project is located about 120km south of Port Hedland in WA’s Pilbara region and has already begun construction. Analysts at Citi say it should be a good money spinner for the company with healthy margins of 52 per cent.

It comes as at least two different consortia advance plans for battery storage manufacturing “gigafactories” in Australia, including one in Townsville led by the Boston Energy Group and another smaller one in Darwin led by Energy Renaissance, backed by UGL.

lithium global supply

Much of the current lithium supply is extracted from salt pans in southern America and elsewhere, but Australia – where it is mostly extracted from hard rock, such as in the Mt Cattlin and Mt Marion mines – is expected to boost its share to nearly one half of global production by 2021, according to the Citi graph above.

The CSIRO, in its recent Low Emissions Technology Roadmap, said Australia has the world’s fourth largest lithium reserves, is well positioned to benefit from growth in the global battery market, which it expected to reach 100GW in the next 20 years.

Pilbara Minerals chief executive Ken Brinsden and the CEFC agree that Australia can play a leading role in the global lithium supply chain, and such projects will ensure a reliable supply for the Australia market.

Brinsden said mine should be commissioned early next year. The company will export the concentrate to China, where two Chinese companies have signed off take agreements to process  into lithium carbonate and lithium hydroxide.

 

 

  

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  • George Darroch

    This is excellent news (and see, there is a place for the CEFC funding mining!). But as a matter of urgency, facilities need to be funded and built to process the lithium in Australia.

    Putting half the world’s lithium on boats and then sending it through the Malacca Strait might make short term sense, but doing so will mean that the processed lithium is then used in China, in their factories and supporting their high-tech clean energy sector. Rather than our own. We have a grand opportunity to become one of the world’s major clean energy suppliers, and we need to seize it.

    After all, we subsidised SA’s submarine and naval industry to the tune of tens of billions. There’s a much more compelling case here.

    • Shane White

      Pity about this though – https://phys.org/news/2017-06-seas-result-billion-refugees.html

      Or will this lithium prevent it? Wanna bet?

      • Alastair Leith

        They don’t mention any SL rise figures in the entire story though! Up to 10m in the Western Peninsular of Antarctica which is now considered by researchers to be in terminal decline. Only a return to preindustrial air and ocean temperature would prevent the calving and slipping of land ice into the ocean. There’s up to some 90 m of SL rise in the ice on the two poles. And given the warming positive feedback loosing all that white ice would have, you’d have to add in more thermal expansion of ocean too. Most of todays SL rise is from thermal expansion not glacial ice melt at the three poles (North, South and Himalayas).

        So yeah, plenty of SL rise will happen Paris commitments or not. In fact Paris aspiration to 1.5º C is a pipedream. That train left the station maybe a decade ago I reckon.

        • Shane White

          Yeh, we’re at Eemian temps now and sea level was 6 to 9 metres higher then. Rignot states that current melt rates from glaciers worldwide (land and ice sheet based) commits Earth to 1 metre SLR by 2100. Melt rate is expected to increase of course. Surely financial turmoil will result.

          1.5C isn’t a pipe dream BUT it is an aspiration that firstly we’ve done nothing yet to achieve and secondly action has been left so late that it’s something that Green Capitalism cannot deliver.

          Hence we must DECLARE AN EMERGENCY and implement a war-like plan, or flood, drown, starve and burn.

        • Shane White

          And https://www.theguardian.com/environment/2017/jun/28/world-has-three-years-left-to-stop-dangerous-climate-change-warn-experts

          Schellnhuber, director of the Potsdam Institute for Climate Impact Research, added: “The maths is brutally clear: while the world can’t be healed within the next few years, it may be fatally wounded by negligence [before] 2020.”

          Johan Rockström of the Stockholm Resilience Centre said: “We have been blessed by a remarkably resilient planet over the past 100 years, able to absorb most of our climate abuse. Now we have reached the end of this era, and need to bend the global curve of emissions immediately, to avoid unmanageable outcomes for our modern world.”

          The answer is obviously not a continuance of capitalism.

    • DJR96

      I was wondering the same thing. How hard can it be? Found this- http://tianqilithium.com.au
      which is great. Although I wonder how much tonnage needs to be trucked from the Pilbara to Kwinana. A lot comes from Greenbushes south of Perth, not so far away.

      • George Darroch

        That’s very interesting.

      • My_Oath

        Tonnage from the Pilbara to Kwinana? None. All the current production from Wodjina goes out through Port Hedland. The production from the Pilgangoora mines is also approved to out through Port Hedland.

        • DJR96

          Exactly. It would be nice to have it processed in Australia, value adding.

          • My_Oath

            Even better would be to have it processed in Australia by Australian companies – like the proposed LiOH refinery planned for Kalgoorlie.

          • Alastair Leith

            Wouldn’t refining it near extraction using RE resources make more sense? (solar thermal for process heat and dispatchable energy + wind & PV for low cost energy)

          • George Darroch

            Solar thermal in combination with PV could make sense. That part of Australia is rather poor in wind resources, whereas the west coast has much better wind. And by the time you take it to the coast, you might as well take it to Perth.

            http://www.renewablessa.sa.gov.au/files/121221windresourcemappingaustralia.jpg

          • My_Oath

            The site proposed for Kalgoorlie, “Mungari”, has been set aside for many years for a 100 MW solar project. http://reneweconomy.com.au/new-push-for-100mw-solar-tower-project-near-kalgoorlie-23714/

    • FeFiFoFum

      Malacca Straits is between Malaysia and Indonesia.
      No need for a boat heading from Australia to China to go anywhere near there ?

      • Brad

        I assumes he meant all the other stuff coming from south america would have to. In saying that im not sure if a boat from argentina would maybe west across the pacific instead

  • Simon

    Giles, on a country by country basis Australia supplies more lithium than anywhere else in the world and is adding capacity faster than anywhere else in the world https://minerals.usgs.gov/minerals/pubs/commodity/lithium/

    Between Australia and Chile we supply about 80% of the world’s lithium – that is pretty good leverage when looking at ways to attract investment in to domestic battery manufacturing.

    • George Darroch

      Is there the engineering and chemicals talent in the state to sustain a growing battery industry? And would the large miners be interested in moving up the value chain, or are they mostly interested in commodity products?

      • Simon

        Interestingly we were asked to present on various lithium chemical processing routes to chemical engineering students at UWA earlier this year at a lunch time lecture. The room was packed and pretty much stayed that way right through the 90 minute session. So that was very encouraging.

        I think that you need to look beyond miners as that is a very particular skill set. It will need companies with expertise in the various manufacturing processes to invest. The companies building the lithium hydroxide plants in WA are both experienced chemical companies with track records in lithium chemical production. Same would go further downstream I would think.

      • My_Oath

        There is one company moving in that direction.

        Neometals is currently a lithium miner but is working towards becoming a chemicals company, rather than purely a minerals producer. They are working towards building their own refinery in WA fed by their producing mine to sell LiOH and LiCO3 to the non-China market.

        Further they are developing their own refining metallurgy.

        The their step is to turn themselves into a battery manufacturer. This is much further off, but they are currently building a battery recycling pilot plant and are undertaking testwork on their new patented battery chemistry technology.

        Here’s hoping they can keep being Australian owned and not be taken over by foreign interests who then move all their tech offshore.

        • Alastair Leith

          Only move it offshore if no support back home from govt to get them through the valley of death. Yes, probably they will!

    • Alastair Leith

      And charging them prior to export with world class wind and solar 😉

  • Brunel

    We should also fine people for throwing lithium batteries in the rubbish bin. Lithium is precious.

    • My_Oath

      There isn’t actually much lithium in them… a far bigger issue is the amount of Cobalt in them and that just passed $60,000/t with no sign of slowing down its price surge.

      Battery recycling is a minute market, almost non-existent, but it is going to boom in the next couple of years. One Australian company, NeoMetals, is already building a pilot plant and is looking to commence construction of a full recycling plant in 6-9 months.

      • Brunel

        Coles and Woolworths sell AA batteries from Energizers that are made from recycled metal. So some people are responsible enough to recycle AA batteries. Thus people should be fined for throwing aluminium cans and plastic bottles in the rubbish bin. Doing so is not banning any product – nor is it a change in our standard of living. It is simply a fine for doing the wrong thing.

        We should also put an extra import tax on gadgets that are powered by non-rechargeable batteries. Again, not a ban, but a tax to encourage better behaviour. Just like the carbon tax.

        • Craig Allen

          I’m visiting Adelaide at the moment. The streets are weirdly clean compared to other states. Fines aren’t needed. Incentives like South Australia’s container deposit are far more effective.

          • Brunel

            Clean streets do not mean aluminium cans are not thrown in the rubbish bin.

            It takes an enormous amount of energy to make aluminium from scratch – when we can just melt down a used can to get clean ingots.

          • Craig Allen

            In South Australia there is a very high recycle rate. People save up their aluminium cans, bottles etc. to give to charities for fundraising. And even the containers that go into bins often get pulled back out – by homeless people who scour the streets. It demonstrates that a modest but well designed incentive can be very effective. I’m sure it would be for batteries as well.

          • Brunel

            I do not think there is a “$1 per AA battery return scheme”.

            Which could be funded by having a $1 tax on each AA battery.

            Just like how people put a $1 coin in a shopping trolley and get it back.

            I would rather fine people for throwing glass bottles in public rubbish bins instead of mandating stinking 4.5L toilets in new houses. Especially given that all the states of AUS have desalination plants!

    • nakedChimp

      If the stuff goes to the dump you at least know where to look for it in a couple of years.
      Dunno about waste burning though.