Lithium Australia still on the sidelines about a new WA battery metals research facility
Lithium Australia is all for the federal government stepping up its support for the battery metals industry, but is taking a bit of a watch and wait approach when it comes to its involvement with the new $135 million battery industry research centre.
The federal government yesterday named Western Australia as the home of the new Future Batteries Industries Cooperative Research Centre (FBI CRC).
The research partnership of 58 industry, academic and government partners will address industry-identified gaps in the battery industries value chain.
The goal is to expand battery minerals and chemicals production and develop opportunities for manufacturing batteries in Australia.
On the industry front, the FBI CRC is being backed by big companies like Lynas (ASX:LYC), Galaxy Resources (ASX:GXY), BHP (ASX:BHP), Independence Group (ASX:IGO), Syrah Resources (ASX:SYR) and Pilbara Minerals (ASX:PLS).
Several juniors are also connected to the initiative, including Protean Energy (ASX:POW), Clean TeQ (ASX:CLQ), Kibaran Resources (ASX:KNL), Volt Resources (ASX:VRC), FYI Resources (ASX:FYI), Cobalt Blue (ASX:COB) and Australian Vanadium (ASX:AVL).
But Lithium Australia is not directly involved with the CRC.
Victorian battery recycling company Envirostream, which Lithium Australia last week agreed to take an 18.9 per cent stake in, is one of the industry participants in the FBI CRC.
“It’s a huge step forward for the industry, there’s absolutely no doubt about that,” managing director Adrian Griffin told Stockhead.
“It does support to a large extent Australia’s Critical Minerals Strategy which was released a couple of weeks ago.
“So at long last the government has been proactive to some extent in supporting the industry and the development of the industry going forward.”
One of the sticking points though for Lithium Australia is the federal government’s R&D rebate policy.
“The federal government needs to review its R&D tax incentives as they relate to energy metals, to allow the required technologies to be developed rapidly,” Griffin said in September last year.
“Without these technologies being commercialised in Australia, we can be assured that most of the value will continue to flow to other countries.
“We need to use our dominant position in the supply of raw lithium materials and our advanced technologies, to maximise the value we get from the lithium supply chain long-term.”
Lithium Australia is happy for the moment to just be connected to the FBI CRC through its stake in Envirostream, but the company may consider increasing its participation later down the track.
“We do have that interest through Envirostream’s contribution, and we are prepared to expand our interest,” Griffin said.
“We are very impressed with the program that the CRC has got.”
Lithium Australia is already very advanced down the path of becoming the first Australian company to do everything from mine lithium to make batteries all under one roof.
The company’s SiLeach process converts mine waste to lithium chemicals, before its VSPC solution turns lithium chemicals into high quality lithium-ion battery cathode materials.
The cathode is used to conduct electricity flows out of a battery or device.
Its recycling tech will recover valuable metals, including lithium and cobalt, from spent batteries.
Lithium Australia is interested in Envirostream because it looks like it has found a way to overcome the problem of collecting used batteries to recycle.
In Australia, less than 3 per cent of batteries are recycled and that’s largely due to the lack of recycling collection points.
According to the CSIRO, battery recycling is an industry that will be worth upwards of $3 billion a year by the mid-2030s.
Griffin said Lithium Australia’s $600,000 investment will allow Envirostream to double the capacity of its shredding in Victoria and expand its revenue stream.
“Then if you dovetail that with the appropriate battery collection mechanism you can put together something that is potentially quite a valuable business, not only from a cash flow point of view, but valuable from an environmental point of view and supply of sustainable metals,” he said.
Lithium Australia has demonstrated with its recycling tech that it can recover most of the metals from a battery.
RM Research said in a research note that the well-timed investment matches Lithium Australia’s battery recycling and cathode technology commercialisation timetable, “putting it in pole position” to capitalise on the impending and rapid expansion of Australia’s lithium-battery recycling efforts.
The firm rated Lithium Australia a “speculative buy”.