MELBOURNE: Australia is seeking investment to develop a battery industry to wring more value from its minerals wealth, the government said in a report on Tuesday.
Australia is rich in reserves of raw materials like lithium used in rechargeable batteries for everything from mobile phones to electric vehicles, but it is shipping its commodities offshore rather than developing a domestic battery industry, the government said in a strategy report.
To reap more value from its reserves, Australia will aim to attract investment to build a battery supply chain, including chemical technology and cell manufacturing, and it is prepared to offer funding incentives, it said.
Under the strategy, the government will offer yearly tax offsets of up to A$200,000 ($144,000) per year for investors and a 10-year exemption on capital gains taxes for investments held for at least a year.
"Australia has a once-in-a-generation opportunity to transform into a major processing, manufacturing and trading hub for lithium-ion batteries," Minister for Trade Simon Birmingham of the ruling Liberal-National coalition said in a statement.
Australia has the world's third-largest reserves of lithium and also produces nine of the 10 elements required to produce most lithium-ion battery anodes and cathodes.
It has the world's largest hard-rock lithium mine and will soon have some of the world's largest chemical plants for batteries, being built by China's Tianqi, and BHP Group , respectively, in Western Australia.
But the country still needs to secure proprietary equipment, processes and technology to convert its raw materials into lithium-ion batteries, the government report said.
The new strategy report may be hard to implement since most of Australia's lithium supply is exported under existing contracts, said Leonard Rowe, the business development director at mining consultants AME Group in Sydney.
"(The strategy) is a good idea but the reality of it is probably remote as we would be competing against the global powerhouse that is China which already has significant scale, and is both the largest manufacturer and the largest market," he said.
The report identified possible target sites for lithium-ion battery cell manufacturing at Kwinana in Western Australia, where BHP Group is building a plant to produce battery grade nickel chemicals, and mining hub Kalgoorlie.
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