Tesla eyes $1b-plus of Australian minerals

Tesla chairman Robyn Denholm says miners, manufacturers and governments must speed up “at an extremely fast pace” the innovation needed to transform Australia from an exporter of fossil fuels into a global new energy superpower (reports The AFR)
4th June 2021
Resources Rising Stars

In a major speech to the mining industry, Ms Denholm predicted that Tesla would soon consume more than $1 billion a year of Australian lithium, nickel and other critical and rare earth minerals for its batteries and electric motors.

She said Australia’s reputation as an exporter of commodities linked to climate change was rapidly being overhauled to become a globally significant supplier of climate change solutions.

“Australia has the minerals to power the renewable energy age throughout the world in the coming years,” Ms Denholm said.

“It will require massive innovation: we need to scale up at an extremely fast pace and mining needs the same kind of innovation as the industries it supplies.”

The pointed remarks were delivered as the mining industry comes under increasing pressure to raise Australia’s global status as the leading supplier of minerals that meet high environmental, social and governance standards into a global market increasingly seeking clean and green suppliers.

Australian mining companies had a good reputation, Ms Denholm said. “You have great expertise and professionalism and [are] preferred by many manufacturers, who are increasingly concerned about meeting both today’s and future ESG [environmental, social and governance] requirements.”

This would “increase on all three aspects: on the environmental impacts including carbon footprint; the worker and human rights; and ethical and social behaviours of companies in the entire supply chain”.

Painting a vision in which Australian miners and downstream manufacturers double down on their ESG credentials, the Tesla chairman told an Australian Minerals Council audience in Canberra on Wednesday that their products already provided confidence to investors and the entire battery supply chain.

Tesla currently draws three quarters of its lithium supply from Australia, alongside a third of its nickel needs – all part of the roughly $5000 worth of minerals and metals in every one of the company’s electric vehicles.

“Australia is capable of supplying almost all of it,” Ms Denholm said.

Furthermore, Australia was alone in having resources in all three critical battery metals as well as other components at the heart of the clean energy transition.

“Lithium-ion batteries are critical to two enormous transitions that are well under way.

“That makes scaling lithium-ion battery production one of the most important technology opportunities of our lifetimes.

“To put it a simpler way: electric vehicles account for less than 1 per cent of vehicles globally at the moment. To reach net zero emissions, that needs to be much closer to 100 per cent within 30 years. So that’s at least a 100-fold increase ahead, just for vehicles.”

Ms Denholm said that shift would, by 2030, generate a global lithium-ion battery market of $400 billion.

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