AHK Mining Cluster: Batteries, Battery Minerals and the Battery Value Chain
On 23 November 2021, AHK Australien and our event sponsor BASF facilitated a webinar to explore batteries, battery minerals, and the battery value chain featured a broad spectrum of panellists from R&D, minerals producers, battery chemicals specialists and the car manufacturing industry.
Over one hundred participants from Australia and overseas attended the live stream and if you missed it, here a summary of the insights on future development of battery industry shared by the panellists.
Event sponsor panel speaker:
Dr Bill McPhee, Asia Pacific Regional Business Development Manager, Base Metals, BASF
Other panel speakers:
Stedman Ellis, CEO, Future Battery Industries Cooperative Research Centre (FBI CRC)
Paul Sansom, CEO & Managing Director, Audi Australia
Andrew Hutchinson, General Manager, Critical Minerals Facilitation Office (CMFO)
Joe Kaderavek, CEO, Cobalt Blue Holdings
Why are batteries an industry focus?
Climate change is one of the biggest problems humanity has ever faced – and one that has to be solved within the next 30 years through decarbonising industry, the residential sector, electricity supply, agriculture and transport. Renewable energy is a key element of the solution, but it has to be combined with energy storage due to its intermittency. Thus, batteries will play a crucial role in a zero-emission future and the future transportation is likely to be dominated by Battery Electric Vehicles (BEVs).
Batteries rely on a range of minerals like Lithium, Cobalt, Graphite, Nickel and Manganese, most of which are available in Australia in large quantities sending mined commodities to other countries for processing – there's an ample opportunity to make Australia the world's leading producer of processed battery minerals.
On the other side of the planet, leading German companies are developing innovative technologies for current and next-generation battery systems. At the same time, German car manufacturers are preparing their production lines for an electrified future, relying on a steady supply of raw materials for batteries and battery components.
Where is the highest demand for batteries, and why?
The classic lead-acid battery is well-known to most people, but it is quite heavy and therefore limited in its application. “With batteries relying on their chemistry to set the ratio of power and energy, a number of new mineral combinations and battery types have emerged serving different purposes ranging from smartphones to electric vehicles (EV) and large energy storage facilities,” commented Bill McPhee from BASF.
“The challenge for battery developments for EV is to bring down cost and increase reach.”
The strong global growth in the EV battery market is accelerated by legislative imperatives that are in place in countries like the United State, China, and Europe. In Australia, there are no tariffs or penalties around CO2 emissions.
Audi introduced EVs into the Australian market in October 2020, and it has started to grow over the past 12 months.
“Currently, only 1% of the new cars market in Australia are EVs, but this will start to grow on a much steeper curve in the future due to government agreements, broader media support and business investments in infrastructure,” said Paul Sansom, CEO and Managing Director at Audi Australia, who will soon move to Volkswagen Australia as part of the merger fulfilment between the two German car brands.
There are different energy storage technologies, so why are batteries suitable for cars?
McPhee explained that the energy storage medium comes down to engineering the overall system and application - combustion is complex, and we'll never be able to put diesel into a smartphone and Hydrogen is difficult to store, it slips past piston rings. "Batteries have a major advantage in that they contain mainly solids with no moving parts, and you get electricity directly without forcing a motion", he added. The barrier to batteries was always cost and recyclability.
Can EVs and their infrastructure requirements match Australia's vast distances?
EV range anxiety is a 'real thing' and needs addressing. However, the reality is that most of the charging will be done at home overnight, and currently, it takes about half an hour to charge for 400 km reach at a charging station.
Andrew Hutchinson from CMFO added that Australia could change from a global quarry to value-add PLUS. He finds it "...fascinating to watch people's mindset change – a car is more of a means of transport, but EVs are also a mobile power source." With the ability to integrate EV fleets into the electricity grid as a mobile power source, stability and frequency control can help mitigate surges. There is even a market opportunity in software and hardware development for integration into other uses. "Australia is a small market, but we have great IP to develop and trial new technology in niche applications. For example, we are leading in the rate of renewables installation and battery installation; we have autonomous mining fleets running off hydrogen. Batteries work well in microgrids for remote communities, e.g. for the Pacific region. Battery technology is exciting, but so is its application," Hutchinson concluded.
Australia is in transition for street parked vehicles toward a future in building construction with a strong commitment to charging stations powered by renewables. Additionally, the Australian Government's infrastructure is growing massively, e.g. ARENA recently invested $25m into smaller companies to increase fast-charging stations in the near future.
Where is the battery development taking Australia?
Stedman Ellis, CEO of Future Battery Industries Cooperative Research Centre (FBI CRC), explained that Australia is very strong on supply of raw materials minerals but can leverage more downstream. In his view, "the 2050 net-zero promise would need a transformation of the economy." The FBI CRC, with partners such as Cobalt Blue and BASF, aims to "prove our capacity to replicate the existing battery chemistries that are going into the EV market which is growing so fast and capture the growth opportunity," said Ellis. In WA, there are investments by mining and chemical industries to produce advanced battery materials for net-zero.
Joe Kaderavek, CEO of Cobalt Blue Holdings, commented that consumers would shape the market. Four years ago, 30% of new car buyers preferred EVs, now the figure stands at over 50%. Today, this demand is less driven by government incentives.
"Cars are not just transport; they are becoming a household power solution, with smart grid outcomes. Not many people in Australia have sat in an EV, but exposure is growing, changing public perception," he said.
Andrew Hutchinson added that in Australia, government policy is more about enabling consumers to make an informed choice and investing in infrastructure to alleviate factors such as consumers' range anxiety, familiarity, lack of options, cost.
Battery minerals – The widely known and the unknown
Lithium and Cobalt are widely known defaults; with the Lithium-Ion battery used by Panasonic in the 90ies.Over time, different chemistries emerged, with LFP, NCM and then NCA (Tesla) and NCMA (General motors, LG).
Australia is rich in battery minerals: Graphite, Manganese, Nickel, Tin, Vanadium. However, beyond exploration, the biggest market in Australia lies in the storage application, according to Ellis, as a value-add to natural resource exploitation. "If the forecast demand for application in EV of growth of up to 9 times by the end of the decade is accurate, the competition and demand of nickel, lithium cobalt will be quite intense," said Ellis. "These are strategic reasons to look for other minerals. This is why a Long Duration Energy Storage Council — a new global industry body — launched at COP26 was announced."
We have Rare Earth and minerals, and lots of both in Australia, mostly in WA, which is why the FBI CRC is located in Perth.
The Cobalt Blue project, on the other hand, is located in NSW. The project is unique within investment markets as a primary cobalt producer (Around 98% of the world's cobalt is a by-product of copper and nickel mining). According to Kaderavek, the mine has a long life (over 20 years) and is an integrated mine-refinery project aiming to produce a battery ready cobalt sulphate. Cobalt Blue collaborates with the FBI CRC to examine value adding pathways to further develop downstream products. There exists strong Commonwealth Government assistance for such high value-add product in Australia; with 16% of the world's cobalt resource but the country only produces around 5% of global supply.
Cobalt Blue Holdings aims to deliver a bankable feasibility study in 2022. After that, they assume a 2-year build and production start in 2025. The project's aim is to double Australian cobalt production and for Australia to become the No2 cobalt producing nation worldwide.
Is there a demand/supply gap to be expected?
Ellis has seen significant movement in the lithium market, batteries is a young industry with a very fragmented value chain. The trajectory is strong demand, but for Australians, a resource-based economy is familiar. Sitting above the mineral resources are the sophisticated history of automation, the refining of chemicals. It could be made faster with outside partners to grow the capability to move downstream with capital and technology. The ambition is to build capability as a reliable partner with strong ESG Credentials to partner with EU participants, e.g. with BASF as a strong partner.
"Developing the most efficient flowsheet between mining resources and cathode active materials manufacturing plants is one of our key interest, ” said McPhee. BASF is part of several FBI CRC programs to see how they can optimise the flowsheets and what might be the most logical way to enter the global supply chain, with the most mineral-dense export as possible, which BASF believe is the Precursor, in a very sustainable way, in jurisdictions with high ESG standards overall.
Sustainability and ESG principles are important factors for buyers
"We are sourcing responsibly with a sustainable supply chain across our entire organisation in Audi including commitments in renewable energy and human rights are important as well. Audi is a member of the Global Battery Alliance, which started in the 2017 World Economic Forum, with a Code of Conduct that is clearly defined,” said Sansom.
Cobalt Blue is also planning for sustainable production. According to Kaderavek, the EU has the highest standards in the world, including CO2 and provenance reporting. Cobalt Blue has finalised self-assessment through the Cobalt Institute. In future, IRMA certification will be needed. Cobalt Blue's focus lies in minimising the footprint and making deliberate choices, e.g. minimising acid consumption, minimising CO2 inputs & energy, whilst treating people well. There is strong EU centred appeal for having high sustainable operating standards, and this ESG qualification for EV makers can take 12 months.
McPhee added that traditionally one only had to be qualified as a supplier. In the past six months, qualifying as a customer for BASF emerged. It includes describing 'what do we do to be a customer, up-and downstream?'
Stedman Ellis confirmed that sustainability is more of a talking point on both ends. There is a collaboration with partners in Braunschweig and the Fraunhofer Institute.
What are the plans for a battery recycling industry in Australia?
At CSIRO's Energy Minerals Roadmap, there is a critical project investigation underway around recycling. In its fundamental economics, battery recycling gets better commercially if batteries can be collected at scale and processed, and CSIRO is looking into it. There also is a COAG commitment to the provenance and end of life issue. A secondary industry will evolve, the IP is ready in industrial parks and equipment, skills and resources are ready. While many factors contribute to the push for recycling, the price of raw materials will help achieve that change.
Ellis added that Australia wants to find a way to recycle – it is good, especially with credentials – as scrutiny will only increase around repurposing, reusing, recycling. It's seen as necessary to bring in know-how from overseas.
Sansom mentioned the VW example where they take a whole life approach with six modules with 12 cells, all individually replaceable. Recycling has been put in place already, with responsible disposal and an overall end-to-end approach.
Kaderavek mentioned the new proposed "EU regulatory framework for batteries – Setting sustainability requirements". Under the mandate for Lithium, Cobalt, Nickel, mandatory publication starts in 2028. In 2030 for cobalt, 12% of new EVs need a recycle credit attached to them. In addition, there will be tradeable credits with secondary markets – meaning economic benefits for those who can recycle.
How to start and finance new projects?
CMFO is involved in facilitating new projects. "We are lucky to have endowments of a World- Class resources sector, we have IP, we have XP, are sophisticated in extracting the stuff," Hutchinson stated that Australia is the best jurisdiction in the World for Mining and Processing.
The following can be a hindrance and good thing – A system of national state and territory regulatory frameworks in sustainable and responsible management, labour market protection, transparency, anti-corruption, as they can delay projects during the raising of capital, but its good investment of time, because it means sourcing from Australia can be done confidently.
Australian Government has a number of departments and agencies such as to offer project facilitation services, such as CSIRO, ANSTO, Geoscience Australia, DFAT, Austrade, Export Finance Australia, the Department of Infrastructure, Transport, Regional Development and Communications and the States and Territories.
The Government had its Modern Manufacturing Initiative, with Critical Minerals being one of its six national priority areas. Recently there was a $2bn facility established under Explore Finance Australia.
The challenge is for Australia to attract foreign direct investment technology and capital to move it downstream. The DMHO as a small team in Canberra is significant but small compared to the level of government investment in Germany which is more significant. Policy settings and commercial partnerships are needed to quickly and safely capture and progress.
What is the market outlook for batteries?
Please see more information about BASF's battery materials at Battery Materials | BASF Catalysts and opportunities for Australia from a study commissioned by FBI-CRC at Australia's $7.4 billion opportunity in future battery industries - Future Battery (fbicrc.com.au).
According to FBI CRC, batteries could contribute $7.4bn per annum to the Australian economy and could support 43,000 jobs until 2030. (Source: Australia's $7.4 billion opportunity in future battery industries - Future Battery (fbicrc.com.au))