Australia captures only half a per cent of the lithium value chain — and must move downstream into processing if we are to benefit from the electric car revolution.

That’s the conclusion of infrastructure advisor InfraNomics.

“We can’t think in history of another strategic material that actually contributes so little to the country of origin,” InfraNomics director Cameron Edwards told a gathering of investors and mining companies in Perth yesterday.

“Even if we continue on the same pathway, by 2025 we’ll be capturing less than what we we’re capturing today.”

Lithium is one of the much-loved battery metals that is expected to see big growth from electric car makers.

>> Scroll down for a table of ASX-listed stocks offering exposure to lithium

The International Energy Agency estimates that the number of electric cars on the road will reach at least 125 million – but could be as high as 220 million – by 2030.

The federal and Western Australian governments have recently thrown their support behind the lithium sector, but Mr Edwards says that’s not enough to capture full value from the market.

Lithium refining is the answer

The key to growing the industry, according to Mr Edwards, is secondary processing.

“Secondary processing is moving beyond the lithium hydroxide, lithium carbonate and it’s about how we bring these companies – which are primarily Japanese, Korean and Chinese – to Australia to operate here,” he said at the Association of Mining and Exploration Companies (AMEC) convention yesterday.

Western Australia already does some refining — but it’s only small scale.

InfraNomics director Cameron Edwards. Pic: AMEC & David Broadway
InfraNomics director Cameron Edwards. Pic: AMEC & David Broadway

Chinese-backed Tianqi Lithium is spending more than $700 million on building a two-stage lithium processing plant in Kwinana to produce 48,000 tonnes annually.

China, meanwhile, accounts for the bulk of global refining, with a 73 per cent share.

“China has had an integrated policy, a holistic policy, for many years and that’s why they have an integrated value chain and capture the majority of the value of lithium,” Mr Edwards said.

“We in Australia are not there yet. It would be wise, I suppose, for the governments to work with other countries to improve the vertical integration of supply chains for the benefits of all.”

Mr Edwards says governments and industry must work together because the window of opportunity for Australia to step up and take a greater share of the lithium market is closing.

“It’s very important that happens in the next 12 to 18 months – maximum 18 months,” he said.

“We’re in that window already. It’s most likely going to close sometime in 2019.”

Government action 

Federal Resources Minister Matthew Canavan and Western Australian Mines Minister Bill Johnston have both vowed to do everything they can to help grow Australia’s lithium industry.

“I do commend the work AMEC are doing, particularly about lithium,” Mr Canavan said on day one of the AMEC Convention.

“I will be catching up with them … to talk about what the federal government might be able to do to help facilitate further investment in the lithium supply chain here in Western Australia and of course right across the country.

“Because we are the world’s largest producer of lithium. We’ve trebled production in the last eight years and there is of course huge future opportunities in that sector.”

Mr Johnston, who has been tasked with heading up Western Australian Premier Mark McGowan’s new lithium and battery metals taskforce, said there is a “revolution happening around the world”.

“At the moment 99 per cent of motor vehicles sold have an internal combustion engine,” he told delegates.

“Regardless of any economic decisions, there’s been policy decisions of governments elsewhere in the world that shows there’s going to be more electric cars used in the future.

“Perhaps 30 or 40 per cent of motor vehicles within 20 years will have electric motors. That is an enormous opportunity for us here in Western Australia.”

The first order of business for the Western Australian government’s recently formed lithium taskforce is to pull together a “roadmap on the future of the industry” over the next six months.

Mr Johnston has also agreed to put $6 million towards funding an energy industry Cooperative Research Centre if the federal government decides to build the $50 million facility in Western Australia.

The federal government, meanwhile, has inked an agreement with the US to partner on critical metals.

The US government recently finalised the list of 35 metals it considers critical, and it includes lithium.

“There is enormous opportunity here to expand our minerals sector because of new demand for minerals for new technologies,” Mr Canavan said.

“I often use the example of a mobile phone, which is made up of 25 different minerals and metals – much more complex than a steam turbine – and we produce 18 of them here in Australia.

“Of the 35 critical minerals the United States has identified, we are in the top five in the world for reserves for 13 of those and we are in the top five for 12 of those minerals in terms of production as well.

“So we’ve got an enormous opportunity to partner with the US here to develop our industries.”

Here’s a recent table of ASX-listed stocks offering exposure to lithium:

ASX code Lithium explorer Price change since Jan * Price (May 24) Market Cap
GWR GWR GROUP 1.1875 0.175 45.4M
IEC INTRA ENERGY 1.16666666667 0.013 5.0M
AVL AUSTRALIAN VANADIUM 1.10526315789 0.04 62.5M
TAR TARUGA GOLD 1.1 0.21 25.3M
DMI DEMPSEY MINERALS 1.03703703704 0.165 11.6M
BSM BASS METALS 1 0.036 75.4M
ORN ORION MINERALS 0.68 0.042 58.4M
MQR MARQUEE RESOURCES 0.627450980392 0.415 16.0M
BMZ BLACK MOUNTAIN 0.6 0.024 5.8M
LCD LATITUDE 0.5 0.03 4.7M
WKT WALKABOUT 0.380952380952 0.145 36.2M
ENT ENTERPRISE METAL 0.368421052632 0.026 7.8M
SCI SILVER CITY MINES 0.333333333333 0.044 11.3M
KOR KORAB RESOURCES 0.310344827586 0.038 10.9M
ZNC ZENITH MINERALS 0.285714285714 0.18 37.2M
DTM DART MINING 0.25 0.01 7.1M
KDR KIDMAN RESOURCES 0.2225 2.445 970.9M
DHR DARK HORSE RESOURCES 0.210526315789 0.023 38.5M
TKL TRAKA RESOURCES 0.181818181818 0.052 17.6M
GSC GLOBAL GEOSCIENCES 0.177215189873 0.465 629.4M
CAZ CAZALY RESOURCES 0.156862745098 0.059 13.6M
RIO RIO TINTO 0.0991503267974 84.085 138.3B
DEG DE GREY MINING 0.0967741935484 0.17 56.9M
AGY ARGOSY MINERALS 0.0642857142857 0.298 275.5M
KSN KINGSTON RESOURCES 0.047619047619 0.022 26.7M
ADN ANDROMEDA METALS 0 0.007 6.3M
MLS METALS AUSTRALIA 0 0.005 14.0M
ZEU ZEUS RESOURCES 0 0.015 2.7M
CUL CULLEN 0 0.002 5.2M
MZN MARINDI METALS 0 0.012 21.4M
ESR ESTRELLA RESOURCES 0 0.023 9.9M
CGM COUGAR METALS 0 0.006 5.5M
OAR OAKDALERESOURCES -0.0322580645161 0.03 1.9M
VMC VENUS METALS -0.0384615384615 0.125 9.9M
NLI NOVOITIO -0.04 0.048 17.9M
AEE AURA ENERGY -0.0434782608696 0.022 21.7M
ADV ARDIDEN -0.0625 0.015 22.1M
KAI KAIROS MINERALS -0.0697674418605 0.04 34.3M
PLL PIEDMONTITHIUM -0.0769230769231 0.18 99.7M
SRK STRIKE RESOURCES -0.1 0.054 7.8M
AOU AUROCH MINERALS -0.1 0.09 8.5M
HWK HAWKSTONE MINING -0.129032258065 0.027 8.1M
ORE OROCOBRE -0.134987806627 6.03 1.6B
MIN MINERAL RESOURCES -0.137365213315 18.4 3.5B
MZZ MATADOR MINING -0.153846153846 0.275 7.0M
CMC CHINA MAGNESIUM -0.166666666667 0.02 5.6M
HNR HANNANS -0.166666666667 0.015 29.6M
AJM ALTURA MINING -0.166666666667 0.375 673.4M
SEI SPECIALITY METAL -0.173913043478 0.019 11.0M
VXR VENTUREX -0.176470588235 0.014 50.4M
PM1 PURE MINERALS -0.190476190476 0.017 4.6M
TAW TAWANA RESOURCES -0.192307692308 0.42 237.1M
CHK COHIBA MINERALS -0.2 0.008 5.0M
DGR DGR GLOBAL -0.208695652174 0.091 55.8M
GXY GALAXY RESOURCES -0.222222222222 3.01 1.3B
AGO ATLAS IRON -0.225 0.031 287.7M
EUR EUROPEANITHIUM -0.230769230769 0.2 109.1M
NVA NOVA MINERALS -0.239130434783 0.035 26.3M
PLS PILBARA MINERALS -0.25 0.885 1.6B
PIO PIONEER RESOURCE -0.25 0.021 27.5M
POS POSEIDON NICKEL (suspended) -0.26 0.037 41.0M
PSC PROSPECT RESOURCES -0.277777777778 0.039 75.3M
ARM AURORA MINERALS -0.289473684211 0.027 3.0M
NMT NEOMETALS -0.292134831461 0.315 173.9M
BGS BIRIMIAN -0.295774647887 0.5 116.4M
KLH KALIA -0.307692307692 0.009 22.6M
TKM TREK METALS -0.310344827586 0.02 6.2M
SI6 SIX SIGMA METALS -0.3125 0.011 5.0M
LPD LEPIDICO -0.327868852459 0.041 121.9M
CAD CAENEUS MINERALS -0.333333333333 0.002 6.5M
KTA KRAKATOA -0.339622641509 0.035 4.0M
LIT LITHIUM AUSTRALIA -0.358974358974 0.125 54.3M
AVZ AVZ MINERALS -0.36170212766 0.15 289.6M
BAU BAUXITE RESOURCES -0.36170212766 0.06 12.9M
ARE ARGONAUT RESOURCES -0.363636363636 0.021 31.1M
AMD ARROW MINERALS -0.368421052632 0.024 7.4M
THR THOR MINING -0.375 0.035 22.7M
PSM PENINSULA MINES -0.375 0.01 7.0M
4CE FORCE COMMODITIES -0.380434782609 0.057 23.1M
VMS VENTURE MINERALS -0.384615384615 0.032 14.2M
MCT METALICITY -0.394736842105 0.023 13.3M
DEV DEVEX RESOURCES -0.4 0.006 5.5M
LI3 LITHIUM CONSOLIDATED -0.4 0.084 7.5M
BOA BOADICEA -0.40625 0.095 5.0M
CXO CORE EXPLORATION -0.413793103448 0.051 33.6M
SYA SAYONA MINING -0.421052631579 0.044 76.5M
MOX MONAX MINING -0.428571428571 0.004 2.7M
BMT BERKUT MINERALS -0.434782608696 0.13 7.3M
MTC METALSTECH -0.452830188679 0.145 16.7M
N27 NORTHERN COBALT (*listed Sep 2017) -0.461538461538 0.245 12.5M
LTR LIONTOWN -0.461538461538 0.028 23.8M
LRS LATIN RESOURCES -0.461538461538 0.007 18.4M
EMH EUROPEAN METALS -0.467625899281 0.37 51.8M
CFE CAPEAMBERT -0.478260869565 0.036 31.8M
CAS CRUSADER RESOURCES -0.485714285714 0.036 17.1M
LPI LITHIUM POWER -0.491228070175 0.29 80.8M
MXR MAXIMUS RESOURCES -0.5 0.001 3.2M
GPP GREENPOWER ENERGY -0.5 0.008 10.4M
INF INFINITYITHIUM -0.524324324324 0.088 17.3M
TRT TODD RIVER -0.547058823529 0.077 4.9M
LKE LAKE RESOURCES -0.553571428571 0.125 33.6M
SUH SOUTHERN HEMISPHERES -0.607692307692 0.051 4.3M
PNN PEPINNINIITHIU -0.717647058824 0.024 12.8M
MTH MITHRIL RESOURCES -0.740740740741 0.014 1.7M
ASN ANSON RESOURCES -0.754285714286 0.043 18.2M
RLC REEDYAGOON -0.8 0.012 4.0M
WML WOOMERA MINING -0.88 0.12 13.5M