Australia on cusp of new mining boom, driven by electric vehicles

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We might not be driving them, but soaring global electric vehicle demand puts Australia in the front seat for a new mining boom, says BNEF.

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Australia might be in the slow lane on electric vehicle uptake, but it is in pole position to capitalise on the new mining boom in lithium and other high value metals and minerals that is being driven by the global shift to EVs.

A new report from Bloomberg New Energy Finance has forecast that demand for copper, high-purity nickel, cobalt and lithium used in the manufacture of EV battery packs is forecast to rise 31 times, 42 times, 19 times and 29 times respectively to 2030, as sales of EVs soar to 30 million by 2030.

At current commodity prices, BNEF says, the supply of these materials for batteries would be worth $US75 billion in the year 2030.

“Global demand for EVs is expected to grow exponentially in the mid-to-late 2020s, when we expect electric vehicles will become cheaper than traditional cars powered by internal combustion engines,” said BNEF’s lead EV analyst for Australia, Ali Asghar.

“This raises the prospect of a mining boom in the high value metals used to make these cars.

“Australia sits on top of vast reserves of almost all these metals, so there is a huge opportunity for our resources sector.

But for a country as wedded to the economic prosperity of its mining industry as Australia, it’s arguable that not enough has been made of this huge EV driven opportunity.

A report published in January by the Association of Mining and Exploration Companies warned that Australia must act quickly and decisively to take advantage of its leading position in the global lithium resources market, or risk missing out on what could be a $2 trillion value supply chain.

And in October, ITK analyst and regular RE contributor David Leitch predicted that the new mining boom driven by EVs and energy storage would be bigger than LNG for Australia, even despite the fact that the federal government’s low-carbon policies remained a disgrace.

Certainly, there is no effort to push EV uptake on the domestic front – a federal policy black hole that BNEF acknowledges in its report.

“We expect EVs to account for 28 per cent of new vehicle sales in Australia by 2030 and 60 per cent by 2040,” Asghar said.

“The road up to 2022 however will be bumpy, as without policy support, electric vehicle sales are likely to stay below 2% per cent of new car sales, making Australia a bit slow on the uptake.”

Western Australia, at least, appears to be waking up to the opportunity the EV boom presents, with much of the nation’s vast lithium resource contained within that state’s borders.

Recent state budget forecasts show royalty income from non iron-ore commodities rising by $160 million to a record $724 million in 2017-18, led a $65 million jump in lithium royalties.

The non-iron ore commodities royalty forecast increases to $834 million in 2019, mainly due to Treasury factoring in a $41 million increase in lithium royalties to $131 million and a $36 million increase in gold royalties to $315 million, the AFR reports.

But it will need to get moving to get all of the key industry supports in place, particularly if it is to compete with other global powerhouses, like China.

“China will lead (the global EV transition), with sales there accounting for almost 50 per cent of the global EV market in 2025 and 39 per cent in 2030,” the BNEF report says.

“China is also expected to play a dominant role in lithium-ion battery manufacturing. It currently holds a 59 per cent share of global production capacity, and this is forecast to rise to 73 per cent by 2021.”

But Ashgar says there’s still room to Australia to take a big piece of the EV resources pie.

“If Australian miners play their cards right, they could have a pivotal role in the EV supply chain”, he said.

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22 Comments
  1. Logical 11 months ago

    Of course if Australia was really sensible we would be researching improvements and planning manufacturing opportunities. Rather than just digging it up and letting someone else sell it and just getting a skim from royalties

  2. Cooma Doug 11 months ago

    I noticed a car on the side of the road near my place. It is less than 15 years old, registerred and functional. The owner offerred me 200 dollars to take it. He has an electric car.
    This might be difficult to accept. But this is going to be normal before 2030. By 2040, a 2015 Corolla will be like a black and white 21 inch valve television in 1980.
    If you find these thoughts rediculous, take the time to watch this vid.

    https://youtu.be/2b3ttqYDwF0

    • PacoBella 11 months ago

      I have watched this video and believe he is right on the money. The point he makes about analysts making overly-cautious, straight-line forecasts is reflected in the predictions in the article above.

      One area that Tony Seba appears to neglect is the social impact of the disruption he identifies as happening sooner and faster than analysts and governments anticipate. Unless there are taxation policies in place when the S-curve takes off, governments will not be able to extract sufficient resources from the “winners” of the disruption to compensate/retrain the “losers”. Given the number of people whose livelihoods will be devastated by these changes, there is a high risk of unfocussed push-back at the ballot box in favour of unscrupulous demagogues like Trump (Pauline Hanson?) promising unemployed workers in the rust belts a miraculous to the good old days (pre-disruption).

      • Cooma Doug 11 months ago

        Thanks for the thoughts.
        Your thoughts on social impacts are interesting.
        We are in a forrest right now and dont yet see the trees.

    • rob 11 months ago

      Cooma doug EVERYONE on reneweconomy has watched this ages ago!

      • Nick Kemp 11 months ago

        Maybe the old guard but hopefully there are new readers here everyday

        • Coley 11 months ago

          Spot on, beat me too it-;)

  3. Mudamah of Manly 11 months ago

    Hooray revenue for clean water, food for the hungry, shelter for the homeless, free education, free medical, research and development, infrastructure, zero emissions, coffers in surplus……surely ‘The Clever Country ‘ could not possibly squander this opportunity (again) for the greed of a wanton few!

    • Nick Kemp 11 months ago

      I hate to be cynical but I’m sure we’ll think of a way

  4. Simon 11 months ago

    Maybe, just maybe, we are making some progress…

    From today’s West: “Tesla meets with Premier to discuss options in ‘Lithium Valley’ Perth”
    https://www.watoday.com.au/national/western-australia/tesla-meets-with-premier-to-discuss-options-in-lithium-valley-perth-20180522-p4zgw0.html

    • rob 11 months ago

      Glad you shared that article! and the 1 comment was also worthy of a read! cheers rob

    • Coley 11 months ago

      Could be a boom time for Western Australians, or a boom time for Chinese ‘investors’

  5. Hettie 11 months ago

    Our unlovely pollies usually have an eye to the main chance. Strenuous efforts to get them to shift focus and loyalty from coal and iron ore to these emerging minerals with longer life expectancies, would have profound benefits.

  6. Jamie Blank 11 months ago

    What about graphite, zinc and vanadium?

    • Hettie 11 months ago

      Indeed. For what its worth, I’ve sent an email to Bill Shorten, suggesting he approach the relevant miners for election funding, and leave moribund coal to those who love it so dearly.
      Included a link to this article.
      Then Labor could go after renewables and EVs for all they are worth, secure in the knowledge that their new backers would be happy as clams.

      • Coley 11 months ago

        As long as their new ‘backers’ aren’t the same ones militarising shoals and other bits of ‘real estate’ well outside of their recognised territorial limits-;)

    • Coley 11 months ago

      Or the main ‘bottleneck’ Cobalt! Does Australia have any?

      • Hettie 11 months ago

        Yes. A quick Google search says 15% of world reserves, 1,100,000 metric tonnes.
        Dotted about, in association with nickel and other metal deposits, and previously viewed as a byproduct, not the main game.
        Because of its rarity, other materials for anodes are being developed, with graphite the big hope. Australia has graphite, dunno if the quality is high enough.

        • Coley 11 months ago

          Thank you Hettie, let’s hope your resource rich environment continues to benefit Australians and not the Global corporations.

          • Hettie 11 months ago

            Under the current Gov’t, Coley, might as well hope for pigs to fly. Only a couple of our mining companies are Australian owned. Gina Rinehart and Twiggy Forrest have both kept control of their companies. The rest belong to China or US interests, I think.
            Wouldn’t matter so much if we didn’t give it all away at crazy low prices. Perhaps a new Gov’t will change the rules, but I’m not holding my breath.
            AND there is now speculation that the weasel in chief might opt to call an early half Senate Election, so the House of Representatives poll can wait until November next year. That hasn’t been done for 50 years, and the punters won’t be happy to be dragged out twice. AND the Senate won’t change until July 1 2019, so there’s no benefit there. In fact, the Coalition is so on the nose they will suffer a wipe out, which means no legislation passed between July and November. Happy days.
            Not.

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