Lithium Valley Main Report 2018
Value Leakage of Lithium Processing
5
Figure: 5 Value Leakage of Lithium Processing
Refining Leak 1.5%
Value captured by Australia 0.5%
Electrochemical Leak 10%
Production Leak 15%
Assembling Leak 73%
Source : InfraNomics 2018
Lithium is a critical component of energy storage devices and WA has the largest hard rock reserves of lithium globally and its consistency is most suitable to high quality manufacturing. Figure 5 shows that almost the entire value of this important strategic resource is captured in other countries and by other processes. Currently Australia captures approximately 0.5% (A$1.1bil) of lithium’s ultimate value mainly as simply processed exported ores. 99.5% (A$213bil) of the value of lithium products is paid to Australia’s trading partners for value added through electrochemical processing, battery cell production and product assembly by WA’s trading partners. Secondary processing in WA alone would capture an additional 12-27% of the value available. This report recommends a review of how royalties are calculated and applied as part of a holistic suite of policies that positively encourages local secondary processing while improving productivity and efficiencies. WA’s Western Trade Coast in Kwinana offers another important advantage. It is one of the most integrated, efficient and productive industrial estates globally. It services world scale oil and gas, resources and agricultural sectors through a concentration of a highly skilled work force, refining, fabrication, chemical, research and innovation, service and supporting companies. The chemical precursors and other requirements for electro-chemical processing are already in place. It has one of the best global examples of industrial ecology with over 158 continuous exchanges between industries. This is based on a strong collaborative approach represented by the Kwinana Industries Council and can be a major building block for creating Lithium Valley as outlined in the governance recommendations below. The availability of the existing synergies to incoming companies enhances their international competitiveness. Global competition for the emerging New Energy metals market is vigorous. Other countries recognise the importance of New Energy metals and storage devices for future growth and are concentrating significant resources to control these supply chains. WA still has the advantage of being upstream of all of them, but this will erode rapidly if competitors are able to establish long term trading arrangements and attract processing facilities to their shores. Ensuring this does not happen requires an integrated policy and infrastructure response at all levels of government to establish the logistics and industrial infrastructure, the research and development base, as well as the policy levers that will attract proponents to the State.
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