As the use of Electric Vehicles (EVs) continues to rise, a new report launched today forecasts a bright future for the Western Australian lithium industry, 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.

The report, titled ‘A case for building resilience into Western Australia’s lithium industry,’ 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 was needed to ensure the immediate viability, growth and longer term sustainability of Western Australia’s lithium industry.

The study, authored by Australian Venture Consultants, found the application of lithium ion batteries in portable devices, energy storage and particularly EV’s will grow from the current 50 per cent to more than 80 per cent market share in the next several years.

Importantly for WA, EVs will be the largest driver of battery derived demand for lithium, growing from the current 60 per cent to just under 90 per cent of market share in the next few years.

CME Chief Executive Paul Everingham said 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. 

“WA is already a significant producer of lithium, representing 50 per cent of global supply of lithium on an LCE basis. This is underpinned by significant production capacity from nine projects, both established and prospective,” he said.

“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 Australia’s upstream lithium sector, and by extension, the viability of downstream opportunities in lithium chemical manufacturing.” 

Lithium projects are resource intensive and require a relatively large workforce.  In 2019, Western Australian lithium companies provided around 4,000 fulltime jobs.  While lithium exports make up one percent of total resources exports, the sector employs four percent of the total mining workforce.

AMEC Chief Executive Warren Pearce said government policy settings to support the competitiveness of current and potential Western Australian lithium projects will be critical in the short to medium term to secure the viability of our upstream mining industry.

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

“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,” he said.

“Put simply, without a sustainable up-stream sector WA simply won’t be in a position to capitalise on future downstream opportunities.”

The full report is available here

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CME Chief Executive Paul Everingham said CME would work closely with BHP to implement the reforms, several of which CME already had in place in line with internal processes. 
 
“Following a review, BHP has committed to maximise the value of its memberships to industry associations such as CME, and we welcome that,” he said. 
 
“CME values the BHP membership very highly.  BHP has played an extremely constructive positive role in the WA economy and community.  We look forward to continuing our longstanding relationship with BHP and all its employees. 

“Going forward, BHP has requested industry associations that it is a member of to develop and agree on a protocol for the allocation of advocacy accountabilities at the national and state level, as well as develop and publish an Annual Advocacy Plan. 
 
“Each policy area in CME has already developed work plans in which our policy priorities for the coming year are outlined to ensure our efforts and limited resources are focused on the most critical issues for our members. 
 
“We regularly track the progress of our priorities, which are closely monitored through our committee process and are published in our annual report and end of year review. 
 
“CME is committed to demonstrating our value to our members and will continue to work hard to give our members the confidence that we are working on their behalf in their best interests.”  

CME will work with BHP to implement the Protocol and Advocacy Plan models before the end of 2020. 

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The Chamber of Mineral and Energy of Western Australia’s (CME) Chief Executive Paul Everingham said the program’s detailed mapping of geological structures to identify potential mineral deposits would help facilitate a new wave of exploration activity across Western Australia.

“Exploration is the lifeblood of future resource development,” Mr Everingham said.

“Without ongoing investment in exploration activities, many resources would remain undiscovered, stifling the growth and prosperity of the sector and the economy into the future, risking employment, investment and government revenue.

“The long-term future of the resources sector in Australia requires a healthy pipeline of active exploration of the State, however this is costly and capital intensive.

“Programs that assist in the exploration process such as Exploring for the Future are critical in helping resources companies to explore greenfields areas and facilitate new mineral discoveries in uncharted regions.”

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Mr Everingham said it was pleasing to hear the PM acknowledge in his CEDA speech that the mining and resources sector had continued to operate during COVID-19, with the sector’s strong export volumes providing much need income for the nation.

“WA’s decision to deem mining an essential service and keep it going through COVID-19 has saved Australia from a total economic fall according to Treasury, with the sector now playing a crucial role in the economic recovery of the nation,” he said.

“The Federal Government has previously admitted the resources sector was being held back by complex layers of State and Federal regulations, making it harder than ever to get new resources projects off the ground.

 “Today’s announcement of a ‘single touch approvals’ system and the Prime Minister’s renewed focus on cutting approval times for major projects by the end of this year from the current 40 days to 30 days is welcome relief for WA’s mining and resources sector. 

“Far from a cliché, streamlined approvals literally brings forward capital investment and create jobs sooner.

“While a high standard of approvals is essential for environmental outcomes, the current inefficient and duplicative approval processes that our mining and oil and gas members have to navigate is holding the sector back rather than allowing it to grow and remain internationally competitive.”

The PM revealed in his CEDA speech that delays to approvals for projects under the Commonwealth Environment Protection and Biodiversity Conservation Act cost industry $300 million in 2019.

Mr Everingham said CME also welcomed the decision to transfer the deregulation task force into the Department of Prime Minister and Cabinet to drive a whole of government approach as to how approval regulatory policy is prosecuted.

“We look forward to continuing our positive working relationship with Assistant Minister to the Prime Minister Ben Morton on reforming the approvals process in order to boost efficiency, productivity and job creation,” he said.

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The Chamber of Minerals and Energy of Western Australia’s (CME) Chief Executive Paul Everingham said that the regulation of cultural heritage was a State responsibility and therefore any shortfalls in existing State legislation must be addressed by State-based reform. 

Mr Everingham said this was the sensible approach the WA State government had taken and was supported by industry.

“The decision by the Australian Parliament yesterday to conduct an inquiry into Juukan Gorge in WA and the operation of the Aboriginal Heritage Act 1972 (WA) seeks to dilute WA State-based reform which has been underway for two years and will see significant reforms and legislation in the WA Parliament by the end of the year,” he said.

Mr Everingham said the resources sector had partnered with Indigenous people for decades and was among the first to enter into comprehensive agreements with Traditional Owners, which continue to deliver a range of meaningful, long term benefits.

“Operating on Native Title land is a responsibility taken very seriously by the resources industry, and this is demonstrated by the significant and ongoing investment by industry in land use agreements,” he said.

“The resources sector in Western Australia fundamentally supports the empowerment of Indigenous people and has championed beneficial economic and social outcomes for Indigenous people through employment, procurement, agreement making and community investment for many decades.

“Efforts must be directed to this important WA State reform and not diluted by a far-removed inquiry.” 

CME is optimistic that broad-based consultation with Indigenous groups, industry and community stakeholders will be maintained in the final stages of the reform process leading to bipartisan support for a Bill to be introduced into Parliament later this year. 

The WA mining and resources sector has a strong relationship with the Indigenous community built over many years of engagement and consultation.

Mr Everingham said this relationship was of fundamental importance to the sector and the self determination of Indigenous groups.

“Indigenous business procurement in the WA mining and resources sector totalled more than $522 million in 2019, demonstrating the commitment by the sector in supporting the economic development of Indigenous businesses and the economic independence of Aboriginal people,” he said.

“The WA mining and resources sector is one of the State’s largest employers of Indigenous Australians, with a recent survey revealing Indigenous participation in the sector at 4.7 per cent, compared to just 1.9 per cent across the entire WA workforce.   Around 22 per cent of apprentices and trainees in the WA mining and resources sector are Indigenous, providing the sector with a significant talent pipeline to facilitate Indigenous people to succeed and progress into a range of roles, including positions of leadership.

“The long-term nature of resource sector agreements negotiated by industry proponents has facilitated step-changes for many communities and we sincerely hope will continue to do so into the future.”

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‘The Resources Sector Powers WA’ campaign will be run across Perth, the South West, Goldfields and the North West by The Chamber of Minerals and Energy of Western Australia (CME) on behalf of the sector.

CME Chief Executive Paul Everingham said while there was a general understanding that WA is a resources state, there was less recognition about the benefits that brings.

“Most Western Australians are unaware just how significant the sector’s impact is on the State, both in an economic and social sense,” he said.

“This campaign aims to start a conversation in the community about these benefits, whether it’s employment and career opportunities and the royalties and taxes paid to governments that are then invested in infrastructure and services.

“We want to raise awareness of the contribution the sector makes to local communities, such as sponsoring events, community grants, supporting sporting groups, and rehabilitating the environment.

“The campaign will also try to dispel some myths that working in the resources sector is dirty, dusty and simply FIFO. We actually develop some of the world’s most cutting-edge technology, so the number of long-term careers available in the sector in the innovation space is growing day by day.”

The campaign includes regional television; regional and metropolitan; digital; radio; billboards; and shopper media/outdoor smartlites.

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Chamber of Minerals and Energy of WA (CME) CEO, Paul Everingham said it was a great achievement for WA to be the only State in Australia where debt is forecast to decline. 

“The State Government is to be congratulated for its sound financial management in reducing debt and managing recurrent spending,” Mr Everingham said.

“Thanks to higher than expected iron ore prices, the State Government is now predicting a budget surplus of $2.6 billion, whereas earlier in the year it was $1.5 billion. 

“The increase in revenue will allow the State Government to repay debt, create jobs, fund infrastructure projects and deliver better services.

“Latest figures also revealed that the resources sector employed a record 124,000 people in 2018-19. This makes the sector one of the largest employers in WA and a significant contributor to the State’s economy.”

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“The number of people employed by the resources sector is higher than at any point in Western Australia’s recorded history. Looking back 10 years ago, the sector was employing less than 70,00 people, there are now more than 50,000 extra people gainfully employed,” said Chamber of Minerals and Energy of WA (CME) CEO Paul Everingham.

“The Western Australian resources sector is well above the national average by employing a much higher proportion of workers at 6.7 per cent, compared to the national average of less than 2 per cent.

“There’s a number of major projects in the pipeline or underway which have bolstered the employment figures, including BHP’s South Flank mine, Fortescue Metals Group’s Iron Bridge development and Rio Tinto’s Koodaideri mine.

“A survey of 41 of CME’s members revealed that in 2017-18, the total direct economic contribution to Western Australia was $38 billion which included salaries and wages, payments to government, business purchases and community contributions to 772 organisations. And more than 13,650 WA businesses were directly supported.”

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“The agreement between Chevron and Newcrest for the delivery of natural gas from the Wheatstone, Gorgon and North West Shelf projects is a great example of how local businesses can take advantage of WA’s reliable and affordable gas supply,” Mr Everingham said.

“The commencement of domestic gas deliveries from Chevron‘s natural gas facilities in the Pilbara has been great news for Western Australian households and businesses, as it provides a cost-effective supply of energy for decades.

“Reliable and affordable energy will help secure WA’s economic growth.

“Western Australia has a great standing for its secure domestic gas supply and today’s agreement will further strengthen our reputation,” she said.

“WA businesses and industry are fortunate to be able to access an affordable and consistent supply of energy well into the future.”

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CME Chief Executive Paul Everingham said CME’s members appreciated the public consultation process that led to the draft, particularly as greenhouse gas emissions is a complex policy and regulatory area.

“Today’s draft guideline clearly acknowledges the need to assess new proposals on a case by case basis on their merits, which is something CME advocated for in our submission earlier this year,” he said.

“We are pleased to see the draft guidance acknowledges the State’s Policy for Major Projects released in August 2019 and seeks to maintain consistency with this. CME maintains that the most efficient path to emissions reduction is through a nationally consistent approach which drives lowest cost abatement.

“The guidance also accepts that climate change policy and associated technological developments and innovation are rapidly changing and better accommodates an adaptive approach in today’s draft than in the March version.”

Mr Everingham said CME, as a member of the EPA’s Stakeholder Reference Group, will work on its response to the draft to enable the EPA to meet its intended March 2020 finalisation date.

“It is essential that we remain a key player in ongoing discussions around the guideline as the WA resources sector will play a critical role in the transition towards a lower emissions global future,” he said.

“This will be achieved through the provision of cleaner fuels such as gas and hydrogen as well as minerals that are essential for batteries, increased electrification and renewables. We are also now home to the world’s largest at scale, industrial reinjection scheme.

“WA has a competitive advantage due to our wealth of mineral and energy resources. We must ensure that our regulatory framework allows our resources sector to remain competitive and innovative.”

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