Australia’s opportunity to become a major player in the $213 billion (and growing) global battery market could be derailed by proposed Federal Government changes to research and development (R&D) funding slated in its latest Budget.
At risk is the chance for Australia to increase its meagre $1.1 billion share of the lithium-based battery value chain by moving beyond simply exporting Lithium concentrated ore, instead establishing a West Australian-based ‘Lithium Valley’ for energy metals similar in scale to Silicon Valley.
So far in Australia, Perth-based Lithium Australia is the only company to produce locally, new-era battery cathode materials for customer tests globally.
Lithium Australia managing director Adrian Griffin says WA’s aspirations to establish something similar to Silicon Valley – a Lithium Valley for the battery industry – are likely to be stymied by Federal Government moves that limit R&D funding for bold industry initiatives.
“Australia’s lithium industry risks being consigned to international backwaters if such an opportunity to become a global front-runner in the emerging battery technology race, is allowed to slip,” Griffin said adding the window for this opportunity is closing fast.
“If Australia shows initiative by providing R&D incentives for industry, we can capture an extra 12-27% (an estimated extra $25-57 billion) of the value of the lithium chain globally,” Griffin said.
“But Australia will never get there unless the Federal Government removes its newly imposed cap, which limits research and development rebates within the lithium-related sector to $4 million a year maximum for development companies with less than $20 million a year in revenue.
“Ironically, while the Federal Government continues to allow open-ended R&D rebates for the biotech sector, if its proposed cuts prevail elsewhere, they will destroy any hope of establishing a locally-based Lithium Valley. “
“There isn’t one company in the Australian energy-metals supply chain, including Lithium Australia, that doesn’t want to see an Australian Lithium Valley established and prosper. The returns to government, industry and participants alike, is mind-blowing in terms of scope, opportunity and capacity.”
The West Australian government released a comprehensive report backing the establishment of a Lithium Valley in the State, with locations like Kwinana favoured which Griffin says clearly indicate that Australia is currently in a ‘rare lithium box seat’.
“We can combine low sovereign risk, widespread energy-metals resources and proven regulatory controls to deliver the type of sustainable and ethical supply lines now desperately sought by European and Asian customers, investors and financiers keen to exit the existing Chinese lithium supply chain.”
“Providing Australia’s battery industry with preferred status under the R&D rebate scheme is a small price to pay for achieving first-mover status, worldwide industry upside and leadership via WA’s Lithium Valley.”
**Australia is currently in a ‘rare #lithium box seat’**
Australia’s opportunity to become a major player in the $213 billion (and growing) global battery market could be derailed.. #lithiumvalley
— Lithium WA (@LithiumWa) July 19, 2018