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Read on to learn more about Australia's processing capacity for key metals such as lithium, rare earths and cobalt.

Electric vehicle (EV) sales and forecasts for the coming decade continue to be reviewed to the upside, leaving little room for doubt that demand for the key raw materials used in EV batteries will increase.

Announcements and commitments from governments and carmakers have led to many raising a question that has been at the center of debates in the industry for years — where will all this supply come from?

Australia is in a privileged position when it comes to resources needed for the electrification of the world, with lithium, rare earths and cobalt found in abundance in the country. But it is not just about mining the right metals, to be used in EV batteries — these materials need to be processed to the right standards.


Read on to learn more about Australia's processing capacity for key metals such as lithium, rare earths and cobalt, and what challenges are ahead for the land down under as it builds out its critical minerals supply chains.

Developing critical minerals supply chains in Australia: Challenges and opportunities

Security and development of regionalized supply chains for EV raw materials have been main concerns for all stakeholders in the past few years ― with COVID-19 putting their resilience to the test.

As the green energy push around the world continues to put a spotlight on electric vehicles, governments have taken a special interest in developing critical mineral resources.

Critical minerals value chains are typically more reliant on the economics of processing than mining, Harry Fisher of CRU Group told the Investing News Network (INN).

"As such, much of the processing has taken place in geographies with either low power or labour costs and weak environmental standards," he said. "Further market concentration in China and its associated rapid changes in export policies can produce significant market volatility impacting the viability of investments elsewhere."

In Australia, a number of states are investigating the development of 'processing hubs' to create synergies for critical minerals industries.

"Due to the supply risk from China, rare earths are likely to be a key area of focus in Australia, with 2 projects in NSW for example," Fisher said.

And it is not just rare earths, the country has the potential to develop processing capacity for lithium and cobalt as well.

However, the development of supply chains for critical minerals in any part of the world will not come without challenges, and Australia is no exception. Each mineral has to go through its own particular process before it can be used in batteries, with most refining for key metals currently taking place in China.

Lithium

Despite being the world's lithium producer, with most of its resources being hard rock, Australia currently does not yet produce battery chemicals.

Miners produce spodumene, a type of feedstock that is then shipped usually to China for processing, but many are starting to look for ways to go beyond that.

"Australian producers are looking at the lithium chemical sector in an attempt to add value to the abundant lithium resources," James Jeary of CRU Group told INN. "There have been some teething issues so far but again, strong plans for the future."

For lithium, Tianqi is working on the commissioning of Kwinana refinery after some issues during initial start-up. Meanwhile, Albemarle is constructing the first train at Kemerton, which is scheduled for completion later this year.

Another top lithium producer, SQM and Perth-based conglomerate Wesfarmers are working on the Mt Holland integrated mine-concentrator-refinery. And more recently, Germany's BASF announced it is part of a pilot project to build a precursor chemical plant to blend the feeds used by battery makers.

"The weak auto industry, limited EV uptake and a lack of strong policy support is likely to limit a foray further downstream," Jeary said. "Shipping issues arise beyond the precursor step."

The lithium content in chemicals is much higher than in a 6 percent spodumene concentrate.

"Shipping chemicals therefore means less waste is transported, increasing efficiency and reducing carbon emissions," Jeary said. "(Although) chemicals do have more of a limited shelf life than concentrate, so cannot be stored indefinitely."

According to CRU Group's forecast, which takes into account the development status of different operations and applies percentage weightings depending on their progress, just over 20 percent of global hydroxide capacity could be based in Australia in 2025.

"Again, there is potential for this to be higher based on additional expansions," Jeary added.

Cobalt

Cobalt processing globally is dominated by China with the country accounting for about 70 percent of global refined production, according to CRU data.

"Relatively small volumes are being added in other countries, but with the exception of Indonesia there are not any significant additions outside of China," Fisher said.

In terms of processing of cobalt, Benchmark Mineral Intelligence expects processing capacity to expand, particularly as new projects begin to enter production from 2025 onwards.

"However, this will remain a relatively small percentage of global refined cobalt production, and there will likely remain an emphasis on exporting concentrates to other regions to be processed into finished products closer," he said.

For Fisher, with Australia's lack of large volumes of mined supply and limited nearby downstream demand markets, "there is limited potential to build up significant processing capacity."

In Australia, Glencore's (LSE:GLEN) Murrin Murrin is the only producer of refined cobalt metal.

"Queensland Pacific Metals (ASX:QPM) is developing the Townsville Energy Chemicals Hub (TECH) and aims to start production in 2023, with mined feed from New Caledonia," Fisher said. "Beyond this, there is no further new capacity expected in the medium term."

In terms of challenges the country faces to expand cobalt processing capacity, Miller thinks Australia will suffer from a lack of investment towards building out a domestic lithium ion value chain.

"As the battery supply chain takes on a greater degree of localisation, those sourcing cobalt from Australia are more likely to process it closer to their end use markets," he added.

Rare earths

For rare earths, the story is similar. Australia's Lynas (ASX:LYC), the only producer of scale of separated rare earths outside of China and the second largest in the world, mines the critical minerals in the country, but its processing facility is in Malaysia.

"Processed REEs in Australia would have to come from new projects, like the Iluka (ASX:ILU) project," Luisa Moreno of Tahiti Global told INN.

Iluka Resources' Eneabba operation involves the extraction, processing and sale of a strategic monazite-rich mineral stockpile that is currently stored in a former mining void in Western Australia. Additionally, the company's Wimmera project in Victoria involves the mining and beneficiation of a fine grained heavy mineral sands ore body in the Victorian Murray Basin for the potential long term supply of zircon and rare earths.

"Also, Northern Minerals (ASX:NTU) has a small-scale plant and is looking to expand resources and build a large-scale commercial plant. The company is focused on the most critical REEs, particularly dysprosium, a highly valuable and relatively scarce element."

Northern Minerals is developing the Browns Range project, which the company bills as the first significant dysprosium producer outside of China.

But for Australia to be able to increase its processing capacity, challenges remain.

Projects need to develop an economic flowsheet, which starts with the production of a high-grade mineral concentrate — which does not apply to ion adsorption clay deposits, Moreno explained.

"If the dominant minerals are monazite and bastnaesite the process flowsheet is likely less complex, but if the project has a multitude of exotic minerals with low percentages of rare earths that is very tough," she said.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Charger Metals (ASX:CHR) has launched its campaign on the Investing News Network

Charger Metals (ASX:CHR) focuses on lithium and other battery metal projects throughout Western Australia and the Northern Territory. Charger Metals currently has three projects in the exploration phase, with each project targeting lithium, nickel, copper or PGEs. The company has a strong management team composed of mining industry professionals with strong backgrounds in battery metals.

The Bynoe project is the company's flagship and covers 62.7 square kilometers. Located in the Northern Territory, the project is surrounded by a successful mine operated by Core Lithium Ltd. Finnis Lithium Project that has produced a total mineral inventory of 14.7 mt at 1.32 percent LiO2. The proximity of a world-class mine creates confidence that the Bynoe project will yield positive results.

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Lake Resources Managing Director Stephen Promnitz

Lake Resources (ASX:LKE,OTCQB:LLKKF) Managing Director Stephen Promnitz says Lake Resources has secured robust financing to scale up lithium production in preparation for the electric vehicle revolution.

Lake Resources has recently established a technology and funding partnership with Lilac Solutions, and the latter has announced $150 Million Series B to scale lithium supply for the electric vehicle era.

Lake Resources: Scaling Lithium Supply with $150 Million Series B Funding www.youtube.com

"Lilac Solutions are actually going to work with us and progressively earn into our flagship Kachi project, and then provide $50 million towards the development of that project. So come the end of October, we should have somewhere around $70 to $80 million in the bank, plus this $50 million commitment from Lilac going forward. And then if we have some additional $75 million options in June next year. Essentially, we can now see a pathway to the entire project being financed," Promnitz said.

Lake Resources and Lilac Solutions signed a partnership agreement wherein Lilac is able to achieve an equity stake in the Kachi project with project funding obligations while providing its leading technology to advance the project.

"There's a real deal here, and now value opportunity. But on top of that, we've de-risked it from the debt side and from the equity side. This project is going to happen, and not only that, we're going to be scaling it up to 50,000 tonnes per annum soon after we get into production. That will make us one of the top five producers in the lithium space."

Watch the full interview of Lake Resources Managing Director Stephen Promnitz above.

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Following an increased focus by electric vehicle makers on supply chain sustainability, Lake Resources NL (ASX:LKE,FWB:LK1,OTCQB:LLKKF) is advancing debt funding options for its flagship Kachi lithium project, and Managing Director Stephen Promnitz says the company is charging ahead to address the surge in battery market demand.

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LKE:AU

Gold isn't all that glitters in the land down under — silver in Australia is a major industry, and the country is home to both large and small players.

When it comes to precious metals, Australia has long punched above its weight — the nation was born riding the wave of a gold rush.

Gold isn't all that glitters through — Australia is also a major global producer of silver. It's among the 10 top producers, and was ranked seventh in 2020, with 1,300 tonnes coming from the many operational mines in the country. By comparison, the world's top producer, Mexico, produced 6,300 tonnes that same year.

Other key players in the silver market are Peru, China and Russia, which produce more silver than Australia, and the US, Argentina and Bolivia, which produce less.


Australia is sitting on quite a lot of the precious metal, with the world's second largest reserves, behind only Peru.

According to Geoscience Australia, one of the country's first mines was a silver-lead mine near Adelaide. Since then, the entire continent has been combed over with a fine-toothed comb, with deposits identified in every state and territory and active mines in every jurisdiction but one (Victoria).

Overall, Australia is well explored when it comes to silver, and since the mid-1800s it's had a constant stream of silver production. Aside from that, the country boasts metals-processing facilities in South Australia that separate the precious metal from its commonly mined counterpart metals, lead and zinc.

Silver companies in Australia

Those looking at the Australian silver market have options. There are plenty of big players with interests in Australian silver, and many smaller players for investors to consider researching too.

Most silver comes from mines dedicated to other metals — Glencore's (LSE:GLEN,OTC Pink:GLCNF) Mount Isa in Queensland produces mainly copper, zinc and lead, but silver is separated by the company's integrated processing streams. Glencore also operates the McArthur mine in the Northern Territory, which is primarily zinc, but between its copper and zinc assets, Glencore produced 7,404,000 ounces of silver in Australia in 2020 — over 200 tonnes.

Elsewhere, BHP (ASX:BHP,NYSE:BHP,LSE:BLT) produces a lot of silver as well at the Olympic Dam operation in South Australia. Perhaps best known for the production of uranium and copper, it also yields significant silver resources to the tune of 984,000 ounces in 2020 (or almost 28 tonnes).

According to Geoscience Australia data from 2016, over 20 mines in Australia produced silver in that year, while there are dozens of other resources identified in each state.

A primary producer of silver is the Cannington mine in Queensland, where South32 (ASX:S32,OTC Pink:SHTLF), a company that was spun off from BHP in 2015, mines silver and lead. Cannington is a big one, producing 11,792,000 ounces in 2020, or 334 tonnes of silver.

Tasmania boasts the Rosebery mine, which has seen 85 years of continuous operations and is currently owned by MMG (ASX:MMG,HKEX:1208). Rosebery, like all the others here, is polymetallic, and besides silver also produces copper, zinc, lead and gold. MMG also has the Dugald River mine in Queensland which also produced silver.

Getting into smaller companies, there are those like New Century Resources (ASX:NCZ) which restarted the Century mine in the Northern Territory for zinc and silver.

The future of silver in Australia

So, you get the picture — there's a lot of silver to be mined in Australia by way of mining everything else.

It's worth noting that because silver operates both as a precious and an industrial metal, and is mined most often alongside base metals, it can be pulled in many directions. However, it traditionally follows (and lags behind) its precious metal sibling, gold, making it a valuable investment commodity to keep an eye on.

Looking forward, the future of the commodity in the land down under — especially given Australia's significant reserves and operator diversity — is as bright as you'd like it, and depends on what investors are most interested in, given the by-product nature of the metal.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Australia took a stand against Facebook and Google earlier this year, and the move could have long-term implications for tech investors.

It was a ban that sent Australians wild and had the whole world watching.

Back in February, Facebook (NASDAQ:FB) stopped users in Australia from posting news in a week-long blackout, reacting to proposed legislation that would have forced the social media behemoth to pay publishers for content.

What prompted Facebook to "friend" Australia again, and what are the potential long-term implications of the squabble? Read on to learn what tech-focused investors in Australia should know about the situation.


Australia squares off against Facebook

On February 25 of this year, Australia's federal government passed the News Media and Digital Platforms Mandatory Bargaining Code. It was developed after extensive analysis by the Australian Competition and Consumer Commission, and is aimed at ensuring that news media businesses are fairly remunerated for their content.

It stipulates that digital platforms such as Facebook and Google (both named in the documentation) must pay news outlets whose content they feature — for example, if content is shared on Facebook or shows up in Google search results. The idea is that this will help to sustain journalism in Australia.

Unsurprisingly, Facebook and Google didn't react well to the code, which was first introduced in 2020.

Google didn't make any moves after it passed, but Facebook quickly made it impossible for Australian users to share news content, and pages for both local and international news organisations went blank — a major concern given the COVID-19 and wildfire concerns that were circulating at the time.

Australian Prime Minister Scott Morrison was scathing about Facebook's decision — which he ironically shared in a Facebook post — declaring the tech giant's actions "as arrogant as they were disappointing." He added, "These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them."

Despite strong feelings from both Australia and Facebook, the dispute was resolved fairly quickly, with the country agreeing to make four amendments to the legislation and Facebook restoring Australian's access to news.

Implications for Big Tech and news organisations

Both Australia and Facebook have claimed victory in the dispute, with a Facebook representative saying the company will be able to decide if news appears on the platform — meaning it won't automatically have to negotiate with any news businesses. Changes were also made to the arbitration process.

Tech experts have pointed out that larger news companies may ultimately benefit from the changes, but smaller ones could be pushed to the side. Major publishers that have struck agreements with tech giants, such as News Corp, Nine Entertainment (ASX:NEC,OTC Pink:NNMTF), Seven West Media (ASX:SWM) and Guardian Australia, may be able to increase their market share while smaller independent players lose out.

A business that is in full support of the laws is Microsoft (NASDAQ:MSFT). During the conflict, President Brad Smith came out loudly in favour of Australia's law, and advised that his company is willing to step up with search engine Bing should Google and/or Facebook pull out of the Australian market.

"In Australia, Prime Minister Scott Morrison has pushed forward with legislation two years in the making to redress the competitive imbalance between the tech sector and an independent press. The ideas are straightforward. Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content," he said in a blog post.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead."

Global reach and tech investor impact

Six months down the road from Australia's landmark legislation, it's tough to say what the long-term impact may be.

That said, market watchers do believe the country is part of a new precedent of forcing Big Tech into paying for journalism — something giants Facebook and Google are not used to.

Countries looking to pursue similar legislation include Canada, where Facebook agreed in May to pay 14 publishers to link to their articles on its COVID-19 and climate science pages, as well as other unspecified use cases. Canada is pursuing other avenues too. Meanwhile, in France, Google said it will pay publishers for news content after the country took up new EU copyright laws that make digital platforms liable for infringements.

For investors, the takeaway is perhaps that while companies like Facebook and Google may seem too big too fail, they too can fall subject to new regulations that can change how they do business. As nations around the world look to take back control from these mega companies, it's important to be aware of possible effects on their bottom lines.

Don't forget to follow @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.

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