Rising demand for renewable energy and electric vehicles is driving significant research and development, and strong growth in battery production around the world. Commodities used to make batteries – notably lithium, cobalt and graphite – will consequently be increasingly sought after in the years ahead.

This is according to Australia’s Department of Industry, Innovation and Science’s Resources and Energy Quarterly published in June.

The department says Australia is well placed to capitalise on these developments, as it is the largest producer of lithium and holds the world’s fourth-largest lithium reserves. “Australia also has modest reserves of graphite and sizable reserves of cobalt. In each case, there is significant untapped potential, with mining projects progressing rapidly.”

However, the department’s chief economist, Mark Cully, says it is not clear yet how far Australia can progress beyond mining and into other parts of the battery supply chain, which are dominated by China. “Despite this, the undeveloped state of the supply chain may result in opportunities emerging that are not yet apparent.”

Market intelligence services provider Project Monitor says, in a July statement, that many share the view of Australia’s Department of Industry, Innovation and Science that demand for large-scale energy storage and electric vehicles will grow strongly in the coming years, however, “it is not inevitable”.

For example, renewable power is widely seen as contributing to recent strong increases in electricity prices in Australia and many European countries such as Germany, Denmark and Spain, says the company.

Australia’s lithium production is centred in Western Australia,

its oldest and largest lithium mine is Greenbushes, 250 km south of Perth, and since last year, production has started at three further mines, notes Project Monitor. These include ASX-listed global lithium company Galaxy Resources’ Mount Cattlin mine, and mining services and processing company Mineral Resources’ Mount Marion and Wodgina mines.

Mount Cattlin’s operations include openpit mining of a flat-lying pegmatite orebody. Last month, the company reported a 41% increase in production during the last three months, compared with the previous quarter.

The Mount Marion mine shipped 84 000 wet metric tons (wmt) of lithium concentrate from April to June and is expected to ship more than 30 000 wmt/m.

Wodgina has a total indicated and inferred pegmatite mineral resource of 120.8-million tons at 1.28% lithium oxide, established from assay results in March.

Meanwhile, strategic metals producer Pilbara Minerals will start construction this quarter at its Pilgangoora lithium project, in the Pilbara region, with first production expected by mid-2018.

Pilbara Minerals’ share price has increased from under 5c two years ago to 40c to date, which reflects market interest in lithium, states Project Monitor.

Lithium Demand
Created in 1980, the lithium battery uses the movement of lithium ions between positive and negative electrodes in a way which creates more power from a smaller source than any other battery before it, explains Project Monitor.

These batteries are basic components of mobile phones, tablets and laptops, and are central to the strong growth of large-scale energy storage and electric vehicles. “Batteries form more than 35% of the global market for lithium.”

Project Monitor predicts that the overall market for lithium is likely to continue to grow strongly, especially considering the proliferation of electronic devices such as mobile phones.

Lithium

is mined from continental brine, pegmatite and sedimentary rock deposits. Lithium minerals that contain lithia, such as spodumene, petalite and lepidolite, are mined from opencut and underground mines, with the largest producers being Australia, China, Zimbabwe and Canada.

There are currently 14 ASX-listed companies mining lithium deposits in Australia, which was the world’s top lithium producer in 2016, according to government agency US Geological Survey.