Can Australian become a hub for Tesla-style lithium ion 'gigafactories'?

Australia is racing to become a hub for lithium-ion battery production with plans for two “gigafactories” to make lithium batteries for smartphones and electric vehicles (EVs).

Gigafactory is a term coined by Elon Musk’s EV maker Tesla.

Tesla is putting the finishing touches on its first Gigafactory in Nevada, US, to produce lithium-ion batteries for its much-hyped Model 3 EV.

The term gigafactory refers to a facility’s annual production capacity in gigawatt-hours (GWh). One GWh is the equivalent of generating 1 billion watts for one hour.

Tesla’s Nevada gigafactory will produce at least 35 GWh of batteries annually.

Telsa is expected to soon announce another three gigafactory sites — and expects to eventually build between ten and 20.

Last week, German manufacturer Terra E announced plans to begin building a 34 gigawatt-hour battery factory in Germany from 2019.

In Australia, two companies are in the race to build gigafactories in Townsville, Queensland and Darwin, Northern Territory.

Tanzania-focused lithium play Magnis Resources (ASX:MNS), as part of a global investment consortium led by Boston Energy and Innovation, wants to build a 15GWh Lithium-ion Battery Manufacturing Plant at Woodstock, about 40km from Townsville, Queensland.

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The plant would produce either 250,000 car batteries per annum (each providing a 400km range), one million home battery units or support 300 microgrids to power small towns.

Magnis Resources had received local and overseas interest in funding and future sales (or “offtake”), said chairman Frank Poulla.

“The level of interest coming through for the Townsville Gigafactory is extraordinary,” he said.

“Being able to create a sustainable supply chain that bypasses the current major battery producing nations is something that really appeals to potential end users and investors.”

Townsville City Council has granted approval for the 400-hectare Woodstock site in exchange for a stake in the global consortium.

“The battery plant has the potential to create enormous economic benefits for the city and we are doing all we can to make it stack up,” said Mayor Jenny Hill.

“This gigafactory could be the biggest stimulus ever for the Townsville economy with the potential of 7000 jobs created. We are committed to making sure that this project is our number one priority. “

The consortium estimates the facility will create up to 1000 jobs directly, 1000 in support business and up to 5000 jobs in downstream original equipment manufacturing.

A feasibility study to initiate the design and engineering phase of the project has now begun.

Separately, Energy Renaissance, a company backed by engineering group UGL (now owned by CMIC), is seeking to build a lithium-ion battery manufacturing plant known as “Renaissance One” in Darwin, with production to be ready by late 2018.

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The facility, with seven production lines supporting 1GWh annual production, would serve commercial and utility-scale markets (not residential) in Australia and South-East Asia.

The first cells are planned to come off the factory line by late 2018.