Report Forecasts Positive Outlook for Lithium Industry in Western Australia

As the use of Electric Vehicles (EVs) continues to rise, the demand of lithium batteries is booming, a new report launched today forecasts a bright future for the lithium industry in Western Australia (WA), however warns government support is vital for the sector to remain sustainable so that the State can take advantage of the growing future global demand for lithium.

This report was commissioned by the Chamber of Minerals and Energy of Western Australian (CME) and the Association of Mining and Exploration Company (AMEC) to investigate what is needed to ensure the immediate viability, growth, and long-term sustainability of the WA lithium industry condition.

The study, written by Australian Venture Consultants, found that the application of lithium-ion batteries in portable devices, energy storage devices, and particularly electric vehicles will increase from the current 50 percent to more than 80 percent market share in the next several years.

For WA, it is important that electric vehicles will become the biggest driving force for the demand for lithium batteries. In the next few years, their market share will increase from the current 60 percent to just under 90 percent of market share.

CME CEO Paul Everingham said that Western Australia had a real opportunity to leverage the emerging lithium sector and become a key strategic player in the rapidly expanding lithium-ion battery supply chain.

He said: "WA is already a significant producer of lithium, representing 50 percent of the global supply of lithium on an LCE basis. This is underpinned by significant production capacity from nine projects, both established and prospective."

"Our comparative advantage in the production of spodumene concentrate and the opportunities to convert this advantage into the manufacture of immediate downstream lithium chemicals presents a significant opportunity for the State's ongoing economic growth and diversification."

"However, global market and other factors are impacting the competitiveness of Western Australian upstream lithium sector, and by extension, the viability of downstream opportunities in lithium chemical manufacturing."

Everingham pointed out that the lithium project is a resource-intensive project that requires a relatively large labor force. In 2019, Western Australia Lithium provided approximately 4,000 full-time jobs. Although lithium exports account for 1% of total resource exports, the labor force employed by this industry accounts for 4% of the total labor force in the mining industry.

Amec CEO Warren Pearce said that the government's policy-setting to support the competitiveness of current and potential lithium mine projects in WA is critical to ensuring the viability of our upstream mining industry in the short to medium term.

Pearce said the policy options recommended by the report included royalty relief, infrastructure support, port access, approval timeframe improvements, and better supply chain connectivity.

He said: "Despite well-placed optimism for the lithium industry into the future, it is difficult to see market conditions in the short-term supporting further significant investment in lithium chemical manufacturing in Western Australia. To put it simply, without a sustainable up-stream sector WA simply won’t be in a position to capitalize on future downstream opportunities."

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