Tesla has inked a five-year agreement to secure a significant stock of lithium from Australia as competition for global supplies sends prices of the mineral skyrocketing.
Liontown Resources plans to commence production in 2024 at its flagship Kathleen Valley lithium project in Western Australia, where it will supply Tesla with 100,000 tonnes of lithium concentrate in the first year and 150,000 tonnes every year after.
That will be enough lithium for nearly half a million electric vehicles in the first year and 700,000 in each following year—a significant portion of the less than one million cars Tesla delivered in 2021.
Australia’s key mining state, Western Australia (WA), hosts several of the world’s biggest lithium mines—along with the world’s biggest operating lithium mine.
The Kathleen Valley Project will be powered with 60 percent renewable energy at start-up and has already promised to supply lithium to battery giant LG Energy Solutions through a similar offtake agreement.
“This means that we now have two of the premier companies in the global lithium-ion battery and EV space signed up as foundational customers, marking a significant step towards realising our ambition to become a globally significant provider of battery materials for the clean energy market,” Ottaviano said.
Notably, the lithium found at Liontown’s Kathleen Valley project is spodumene, which is considered the most critical type of lithium ore due to its high lithium content.
It comes amid a lithium-based battery boon, with the technology being used across industries seeking to reduce carbon dioxide emissions—including in big electric storage systems positioned in the electrical grid to support solar and wind energy.
As a result, lithium prices have continued to rise sharply, with current prices of lithium carbonate prices in China at an all time high, exceeding a staggering 400,000 Yuan per tonne (US$63,000 per tonne)—an eightfold increase in the span of a year.
Calls to Bring Battery Manufacturing to Australia
WA’s abundant reserves of minerals required for batteries has spurred calls to bring life to a new battery manufacturing industry in Australia.The state boasts around 20 percent of both the world’s lithium and nickel reserves—two key elements used in the manufacturing of Lithium-ion batteries.
Currently, however, these minerals are all exported overseas to feed the world’s battery manufacturing industry—including the world’s biggest producer, China.
Curtin University Professor of Sustainability Peter Newman—and the lead author for transport on the Intergovernmental Panel on Climate Change (IPCC)—explained that WA was in a prime position to establish a complete battery manufacturing supply chain.
“There are huge opportunities right through the value chain, and at this stage, we’re just digging it up and sending it off,” Newman told The Epoch Times on Jan. 21.
“We have the largest lithium mine in the world, and that is now going to be processed in two places: in Bunbury and in Kwinana, to a very high-quality lithium that can go straight to a battery manufacturer,” he said.
“[This is] because in Australia, we have high quality science, analytical, and engineering capabilities to make and run these factories.”
Newman said the same skill set could be extended to the final step in the battery manufacturing process’s supply chain.
“A high-quality process requires a different kind of mindset [and we have] to realise that this can actually now apply to any of the products that we produce in Australia,” he said.
Australia has virtually no battery, solar, and wind manufacturing capabilities and has begun importing vast quantities of the tech from China.
Newman pointed to the fact that Australia’s own domestic manufacturing could use renewable energy, such as solar, and limit its carbon dioxide emissions.
Comparatively, China’s primary energy base remains coal, with much of the coal burned in a dirty and inefficient manner using subcritical coal plants.
“You add to that a green element where we can produce green lithium or green steel because we have solar that’s very cheap—and a lot of it,” he said.
“And we do it on the site, so we don’t waste that energy, we’re doing it very close to where the product is being mined ... that’s the next economy.”
