With the increasing adoption of electric vehicles (EVs), a new report foresees a bright future for the Western Australian lithium industry, yet notes that Government support is vital for the sector to remain sustainable.
The report, A case for building resilience into Western Australia’s lithium industry, was commissioned by The Chamber of Minerals and Energy of Western Australian (CME WA) and The Association of Mining and Exploration Company (AMEC) to investigate what was needed to ensure the immediate viability, growth and longer-term sustainability of Western Australia’s lithium industry.
The study, authored by Australian Venture Consultants Pty Ltd, found the application of lithium-ion batteries in portable devices, energy storage and particularly EVs will grow from the current 50 per cent to more than 80 per cent market share in the next several years.
Importantly for Western Australia, the report highlights that EVs will be the largest driver of demand in the battery sector, growing from just over 60 per cent of battery derived demand for lithium currently to just under 90 per cent in the next few years.
Chief Executive of the CME WA Paul Everingham said Western Australia has a real opportunity to leverage the emerging lithium sector and become a key strategic player in the rapidly expanding lithium-ion battery supply chain.
“WA is already a significant producer of lithium, representing 50 per cent of global supply of lithium on an LCE basis. This is underpinned by significant production capacity from nine projects, both established and prospective,” he said.
“Our comparative advantage in the production of spodumene concentrate and the opportunities to convert this advantage into the manufacture of immediate downstream lithium chemicals presents a significant opportunity for the State’s ongoing economic growth and diversification.”
“However, global market and other factors are impacting the competitiveness of Western Australia’s upstream lithium sector, and by extension, the viability of downstream opportunities in lithium chemical manufacturing,” Mr Everingham noted.
Lithium projects are resource-intensive and require a relatively large workforce. According to the CME WA, in 2019, Western Australian lithium companies provided roughly 4,000 full-time jobs.
AMEC Chief Executive Warren Pearce added that government policy settings to support the competitiveness of current and potential Western Australian lithium projects will be critical in the short to medium term to secure the viability of the upstream mining industry.
Policy options recommended by the report included royalty relief, infrastructure support, port access, approval timeframe improvements and better supply chain connectivity.
“Despite well-placed optimism for the lithium industry into the future, it is difficult to see market conditions in the short-term supporting further significant investment in lithium chemical manufacturing in Western Australia,” Mr Pearce said.
“Put simply, without a sustainable up-stream sector WA simply won’t be in a position to capitalise on future downstream opportunities.”
The full report can be viewed online here.
