Lithium Valley Main Report 2018
The Federal Government can thus prioritise support of local, emerging and innovative suppliers in purchasing or tendering processes as a risk-manageable means of supporting new products and championing Australian technological innovation. Procurement guidelines in government purchases can be used to help establish markets for new energy innovations and products in Australia and especially WA. 3.2.4. Standards Set high standards for refined products of New Energy minerals to promote quality and traceability. As outlined in this report the core attraction for bringing New Energy industries to WA will be whether we have the highest quality product for their batteries in the world. It is therefore recommended that the Federal Government develops new standards for refined products of New Energy minerals such as purity, contaminants and grades that meet the kind of evolving world best requirements from battery producers. Similar to import locations that require pricing resources on quality, export locations like WA could also codify standards, quality and benchmarks for a global market, such as is the process for pricing Brent crude, TOCOM gold or Iron ore 62% CFR Tianjin. This increases the international importance of products from WA as well as standardising product and increasing jobs in the testing and certification sectors. Currently the market grades for lithium are: as Lithium carbonate, min 99-99.5% Li 2 CO 3 ; large biannual contracts, del continental USA, $/kg or Lithium hydroxide, 56.5-57.5% LiOH; large contracts, packed in drums or bags, del Europe or USA, $/kg or Lithium hydroxide monohydrate min 56.5% LiOH 2 O; and technical and industrial grades, contract prices DDP Europe and US, $/kg. 4 The opportunity exists to standardise quality and pricing based upon an Australian standard that will centralise trading around Australian product and lead to greater value-adding local industry as part of the focus on WA as being the Lithium Valley of the world. 3.2.5. Prioritise selection of GST and royalties to take advantage of New Energy industry Reform the GST model to enable New Energy industry The current GST system penalises states from developing resources projects as there is an imbalance between the generation of resource royalties and the subsequent redistribution as a result of the Commonwealth’s horizontal fiscal equalisation model. The long-term consequences of this policy as it currently stands are unlikely to be beneficial to Australia’s long-term development, especially in the resources sectors. In addition, this does not encourage value- adding industries to work with such mineral extraction. Reforms can now happen and the new energy industries opportunity provides the political momentum to adjust the model. The Federal Government could bring to COAG the reform of royalty systems and the treatment of royalties in the Commonwealth’s horizontal fiscal equalisation model as part of the on-going
process of adding value in the economy through New Energy industry. 3.2.6. Foreign Investment Review Board – Strategic Resources
Include strategic resources as a new section for Foreign Investment Review Board approval. Strategic resources should be defined although at a minimum should include lithium, cobalt, rare earths, high purity alumina, graphite, manganese and vanadium. Transactions such as the proposed Altura / Shaanxi investment highlight the opportunity to include a new class of conditions required before approval of foreign investment in this sector. For example, a condition
4 Industrial Minerals (2018), Lithium, http://www.indmin.com/Lithium.html . (Accessed: 01 May 2018)
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