Australia Gains Power from Decarbonisation Shift

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by KnowESG
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Image courtesy of Bianca De Marchi/AAP PHOTOS

At a conference in Singapore, industry veteran Joe Lowry (aka "Mr. Lithium") stated that Australia has gained the upper hand over China in critical minerals. However, he cautioned that the lithium industry is ill-prepared to support the upcoming energy transition.

Global Lithium President Joe Lowry says, "The guy with the rock wins," and the world will soon see this play out. Although China had taken the lead by investing in lithium production in the past, lithium is expected to grow tenfold this decade. As everything in the energy transition is based on lithium-ion battery technology for electric vehicles, Mr. Lowry emphasised the importance of adequate preparation in the lithium industry.

North America is financing and constructing new battery capacity with the aid of laws that offer significant tax incentives for establishing a sovereign supply chain for electric cars and new energy equipment. This supply chain includes essential raw materials from allies such as Australia.

The growing need for direct shipments of minerals from Africa to China will have significant implications for Environmental, Social, and Governance (ESG) considerations.

Australia is well-positioned to benefit from the competition for minerals that are free from slavery and war, as European car makers and battery producers have committed to only accepting critical minerals that meet ESG standards related to human rights and sustainability.

Joe Lowry stated that, in his opinion, the balance of power has shifted completely from China to Australia.

Nonetheless, he predicts that there will continue to be a shortage of critical chemicals. For instance, Albemarle, a global chemicals company, has projected a demand of 1.8 million tonnes of lithium by 2025, which is thirteen times the amount Pilbara Minerals in Western Australia plans to produce this year.

At the same conference, Chalice Mining CEO Alex Dorsch stated that there is a growing demand for high-quality supplies of nickel and other metals required for decarbonisation and various technologies.

In 2020, the discovery of Chalice's Gonneville deposit in Julimar, Western Australia, was the largest nickel sulphide discovery in over two decades and the most significant platinum group elements discovery in Australia's history.

Mr. Dorsch also mentioned that the Australian federal government had pledged support for exploration projects like Julimar and that the resource's size is expected to continue to increase significantly.

Mr. Dorsch emphasised the significance of these critical metals due to their concentrated supply chains in regions like South Africa and Russia.

The first-ever Future Facing Commodities conference has attracted participants from 60 companies across Australia, Canada, Asia, the United Kingdom, and the United States.

The event organiser, Stewart McDonald, stated that we live in a world with rapidly evolving technology and mounting pressure to address climate change, resulting in a shift away from traditional energy sources towards more eco-friendly alternatives.

Madeleine King, who recently assumed the role of Minister for Resources, invited conference attendees to visit Western Australia and invest in the region.

According to Minister Madeleine King, critical minerals are crucial not just for climate mitigation but also for global security.

She believes that the demand for various minerals, such as lithium, cobalt, rare earths, and platinum group elements, among others, will continue to grow. She also mentioned that Australia's critical minerals strategy would ensure that raw materials are processed within the country, with $1 billion already allocated to finance-related projects.

John Stover, a portfolio manager at Tribeca Investment Partners, acknowledged that the mining industry has undergone some self-examination in the past year due to falling share prices. However, he anticipates that demand for battery minerals will surge by 20 to 40 times by 2050, fueled by the rise in electrification.

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Source: The Area News


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