The world Lithium-production industry is currently undergoing a massive shift, as demand soars and multinational companies gamble on finding new deposits of the Earth’s lightest metal.
Rode the winds of fortune,
Cast his life in a Two-up game…
Redgum, Another Country
A flutter on the gee-gees, a game of KENO in the pub, a scratchie for Christmas or a ticket in the TATTS. Everyone loves to gamble occasionally. And it’s no different in the mining industry. Throughout history, miners have gambled on striking it rich and finding the mother lode in places where no-one had looked before.
Lithium is currently one of the hottest minerals around. As consumers flock towards EVs, and lithium-ion power cells become as ubiquitous as the old AA dry cell batteries, mining companies are sinking fortunes into discovering new sources of spodumene: the source compound for lithium.
But is lithium extraction really worth betting on? And does lithium-based storage face some stiff competition from hydrogen power? Let’s take a look at the numbers and see where they fall.
The Lithium Lottery.
Americans love their guns. The Russians love fighting. And New Zealanders really love their L&P … but what do Australians love? According to research, we Aussies just absolutely love, love, LOVE our pokies!
Coin cascades
Despite having only half a percent of the world’s population, Australia possesses 20% of the planet’s pokies. What’s more, 80% of these coin-guzzling machines are located outside of casinos. In RSLs, city bars, country pubs: you can usually find a pokie or two clunking away in a corner.
From Two-up games in the Western Desert to on-line poker, gambling, it seems, is part of Australian culture. So it’s no surprise that betting on the success (or otherwise) of mining operations is also a big part of the Aussie psyche.
The lightest metal
Lithium mining is big in Australia. And it’s getting bigger. Australia currently produces around 40,000 tonnes of lithium annually, most of it coming from mines in Western Australia. A company called Core Lithium is in the process of establishing a lithium mining operation in the Northern Territory and they are betting that a significant amount of the element will be produced there.
American market analysts Fitch Solutions also see Australia as a vital part in the world’s lithium supply chain. According to Fitch Solutions, Australia possesses “the world’s best commercially viable reserves of [lithium-bearing] spodumene* at present.”
*Lithium aluminium inosilicate LiAl(Si03)2 is one of the main source minerals for lithium.
A battery revolution
Green energy such as wind- and solar power has to be stored. So along with the countless other uses for lithium-ion batteries (think cars, computers, Buzz Lightyear toys, smart phones, spacecraft and hearing aids), storage for electricity produced by wind farms and domestic solar panels requires a huge number of batteries.
In an article published in June 2022 in Manufacturer’s Monthly, the global market for lithium-ion batteries will be worth $242 billion by 2026. The article observes that an opportunity now exists for Australia “to build the whole battery value chain from mining of battery minerals to processing, battery active materials and eventually cell manufacture. This opportunity could contribute $7.4 billion annually to Australia’s economy…”
Hedging their bets
China still maintains a stranglehold on world production of lithium. According to the economic research organisation FDi Intelligence, China currently controls around 65% of the world’s Lithium processing and refining capacity. But with issues over the security of supply, many countries are looking to Australia for their lithium.
A recent visit to Australia by the French trade minister Olivier Brecht highlighted the desire for western countries to work with Australia to ensure that the raw materials used in battery production — cobalt and graphite as well as lithium — remain available and at a viable price.
But lithium has competition in the green energy sector. It comes in the simplest element of them all: hydrogen.
Hydrogen on the Rise.
The universe is mostly composed of hydrogen and helium. The rest — a mere, 2% — is made up of all the other elements. So next time someone says “I bet you can’t name the three most common elements in the universe” you can answer “hydrogen, helium…and others.”
The new superfuel
Germany is leading the way in the development of hydrogen power. With supplies of conventional energy such as natural gas coming under increasing strain (not least because of the current events in Ukraine) Germany has been forced to consider alternative sources of energy.
Hydrogen is produced using a number of processes including thermal reforming of natural gas, hydrolysis and biomass gasification. The resulting gas can then be used in hydrogen fuel cells which generate power using a chemical reaction rather than combustion, producing only heat and water in the process.
Australia’s role in global hydrogen production
Through an organisation called H2Global, German industrialists and financiers are encouraging countries to make a move towards hydrogen production alongside the mining and refining of lithium. And although the organisation is yet to begin actively funding hydrogen production in Australia, it “continues to have constructive discussions about possible projects” and is “optimistic for the local market.”
H2 a-go-go in Gladstone
A proposed new hydrogen and ammonia production facility located in the Queensland city of Gladstone is currently in its final planning and approval stages. Construction is expected to begin in early 2023 with Phase One of the project due to be completed in 2025. The A$4.7 billion facility will convert natural gas to hydrogen and ammonia using 100% renewable solar and wind energy.
Bet on STG Global.
With hydrogen production still in its infancy in Australia it would seem that, for the time being at least, investing in projects that are mining and refining lithium are the best bet. But things move very rapidly in the natural resources industry, so at STG Global we keep a close eye on trends happening both in Australia and across the world. After all, our machinery and plant is designed with longevity, adaptability and versatility in mind, so we are constantly evolving our products to reflect our customer’s demands.
A toss of the kip
Mining is always a gamble. Sometimes the coins both land head’s up; sometimes both are tails up. But as lithium mining continues apace across the country, and the arrival of hydrogen production schemes on the very near horizon, you can bet on one sure thing: STG Global is here for the long haul. So when the time comes, if you need gear to support your mining operations, whatever they are, we can provide it.
And that’s a sure bet!
