Denholm noted that the US awarded Australian miner Lynas Rare Earths $US258 million ($394 million) to build its heavy rare earths processing plant in Texas, while Pilbara Minerals is partnering with Korean giant POSCO to build a lithium hydroxide refinery in South Korea.
She said Australia could be more than a “dig and ship” or even a “mine and refine” nation with less generous incentives than those offered by Biden – but that the federal government needed to act now.
“Australia can harness its technical capabilities to manufacture battery cells and all the key components – cathodes, anodes and electrolytes – that go into them,” Denholm said.
“Australia would need a less-than-10-per-cent credit to become competitive in refining, 10 per cent for precursor and cathode material plants, climbing to around 30 per cent for competitive cell manufacturing.
“It’s now time we scale our ambitions and go from proposals to production. The longer we wait, the greater risk we have of this opportunity passing us by as other countries – without any or as much of the underlying minerals – leapfrog us into capturing the most valuable parts of the battery supply chain.”
Australia is already one of the world’s biggest lithium producers and ranks among the top nickel, cobalt, manganese ore and rare earths producers, but nearly all of it is shipped to Asia for processing into value-added products.
The government has listed battery making as a top industry priority.
A Productivity Commission report earlier this year recommended consideration of quotas for local production amid a boom in demand as the world shifts to clean technology.
However, it warned that Australia should not subsidise industry and should instead focus on areas of natural advantage such as mining and exporting critical minerals.
Prime Minister Anthony Albanese said in a speech to the Minerals Council conference on Monday that the clean energy revolution would drive the global economy for the next two decades, with Australia at an “extraordinary intersection of unprecedented global demand and abundant national supply”.
“This is a chance Australia will only get once. That’s why our government is determined to work with you to convert this moment of opportunity into a generation of prosperity,” Albanese said.
BHP chief executive Mike Henry said in June that the government did not need to match the US government’s huge subsidies to boost critical minerals, but warned over regulatory interventions that risked making the country less attractive to investors.
“What governments here, federal and state, should focus on are those things within their control to make investment fundamentally more attractive – not simply due to the sugar hit of a subsidy,” he said.
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