Australia to reap benefits of EV future

A team of researchers from James Cook University in Townsville has discovered the geological source of Australia's deposits of dysprosium, a rare-earth metal already being mined in Western Australia for use in motors and generators for electric vehicles (EVs).

According to a report from the ABC last week, the scientists have unearthed the geological origin of the metal near Halls Creek in the Kimberleys. The dysprosium forms from salty fluids flowing over sedimentary rocks from up to 1.65 million years in the past.

"Dysprosium in particular is an essential component for magnets, for turbines and electric motors," said Carl Spandler, Associate Professor at the university's Economic Geology Research Centre.

"Adding a little bit of dysprosium to the magnet allows the magnetism to be retained, even at very high temperatures," said Spandler, as quoted by the ABC.

The team's discovery means other deposits of dysprosium around the country can be unearthed faster – and at $US235 per kilogram, the exercise is well worth the investment by mining companies. One reason the price is so high is China's lock on production of the mineral, China producing 98 per cent of the world's supply of rare-earth minerals.

"We've shown that a large proportion of northern Australia has potential to contain these minerals," said PhD student Teimoor Nazari-Dehkordi. The way the dysprosium has formed in Australia is unusual. Elsewhere the mineral is a by-product of volcanic activity.

"We believe that these deposits are not related to any magmatic activities in the local area," Teimoor was quoted as saying by the ABC.

"There are already reports of this type of ore mineral happening in other places, for example in parts of Canada there are very similar geological settings.

"It's good to know that Australia has the potential to soon become a major producer."

Within two years, production of dysprosium at the pilot mine at Browns Range in Western Australia is set to double from the current output of 50 tonnes. At that point it will represent 15 per cent of global dysprosium production.

The dysprosium breakthrough is great news for miners and for supporters of electric vehicles, but there's even better news to tell, as reported by the Financial Times and the Sydney Morning Herald.

Six lithium mines have opened in Australia over the past two years, and the nation is shaping up to be the largest supplier of lithium in the world. The country is forecast to supply half the world's lithium needs by 2020.

“We [Australia] are already global leaders in gold and iron ore and we can do the same with lithium,” said geologist Neil Biddle, co-founder of Pilbara Minerals, in an interview with the Financial Times. Biddle's company opened its Pilgangoora lithium mine and processing plant in October, four years after he and four colleagues discovered the huge lithium deposit.

In the near future the Pilgangoora mine and two neighbouring sites will be able to ship up to two million tonnes of spodumene concentrate, an ore containing roughly six per cent lithium. This is processed in China where lithium hydroxide and lithium carbonate are extracted for use in battery production.

Overseas investors have bought into the local mines and the WA government is encouraging miners to go beyond just digging lithium out of the ground. Currently, pricing for spodumene concentrate is $961 a tonne, versus as much as $18,000 for the same quantity of lithium hydroxide.

The growing need for 'precursors' such as lithium hydroxide and lithium carbonate is potentially so lucrative that primary-industry firms are already gearing up for the secondary-industry processing of spodumene concentrate in the production of lithium hydroxide.

Some industry analysts have cautioned that the new resource boom could be short-lived however. Battery makers may find an alternative to lithium in the quest for batteries that are cheaper to make and offer more energy density. And even if lithium remains an important element of batteries for electric vehicles, Australia's primary-industry exporters of lithium face competition from Chile, which is extracting lithium from brine (seawater).

According to the Financial Times report, analyst Morgan Stanley expects that the price of lithium will drop 45 per cent by 2021, due to the low-cost lithium out of Chile. But American investor Albemarle Corp has postponed expansion of its lithium brine production in Chile, while bringing forward the construction of a $400m lithium hydroxide processing plant in Kemerton (Western Australia).

Due to recent developments in battery technology, the manufacturers prefer their lithium to be in the form of lithium hydroxide rather than lithium carbonate. Australian mines can supply lithium hydroxide through 'hard-rock mining'.

“The evidence for the shift to hard rock mining is in all the new mines like ours which are attracting finance and big players such as Albermarle targeting expansion of hard rock investments,” said Ken Brinsden, MD of Pilbara Minerals.

“We want to go from digging rocks in the ground to making precursor on a scale that doesn’t exist anywhere on the planet,” said president of BHP Nickel West, Eduard Haegel, in the FT report. According to Haegel, the closer proximity of Western Australia to large battery-manufacturing markets like Japan, South Korea and China is an advantage that Chile cannot as easily overcome.

In the meantime, the Sydney Morning Herald reports, the Pilgangoora mine has already sold 100 per cent of its 'stage-two offtake' to South Korean and Chinese customers, including automotive brand Great Wall.

"Pilbara Minerals has now well and truly arrived as a new global lithium producer. We are all firmly of the view that our journey is only just the beginning," Brinsden was quoted as saying in the SMH story.