Tesla chairman Robyn Denholm says miners,manufacturers and governments must speed up “at an extremely fast pace” theinnovation needed to transform Australia from an exporter of fossil fuels intoa global new energy superpower.
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.
Tesla chairman Robyn Denholm says Australia’scritical minerals industry needs to scale up “at an extremely fast pace”.
She said Australia’s reputation as an exporter ofcommodities linked to climate change was rapidly being overhauled to becomea globally significant supplierof climate change solutions.
“Australia has the minerals to power the renewableenergy age throughout the world in the coming years,” Ms Denholm said.
“It will require massive innovation: we need toscale up at an extremely fast pace and mining needs the same kind of innovationas the industries it supplies.”
The pointed remarks were delivered as the miningindustry comes under increasing pressure to raise Australia’s global status asthe leading supplier of minerals that meet high environmental, social andgovernance standards into a global market increasingly seeking clean and greensuppliers.
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 meetingboth today’s and future ESG [environmental, social and governance]requirements.”
This would “increase on all three aspects: on theenvironmental impacts including carbon footprint; the worker and human rights;and ethical and social behaviours of companies in the entire supply chain”.
Scaling lithium-ion battery production [is] one ofthe most important technology opportunities of our lifetimes.
Painting a vision in which Australian miners anddownstream manufacturers double down on their ESG credentials, the Teslachairman told an Australian Minerals Council audience in Canberra on Wednesdaythat their products already provided confidence to investors and the entirebattery supply chain.
Tesla currently draws three quarters of its lithiumsupply from Australia, alongside a third of its nickel needs – all part of theroughly $5000 worth of minerals and metals in every one of the company’selectric vehicles.
“Australia is capable of supplying almost all ofit,” Ms Denholm said.
Furthermore, Australia was alone in havingresources in all three critical battery metals as well as other components atthe heart of the clean energy transition.
“Lithium-ion batteries are critical to two enormoustransitions that are well under way.
“That makes scaling lithium-ion battery productionone of the most important technology opportunities of our lifetimes.
“To put it a simpler way: electric vehicles accountfor less than 1 per cent of vehicles globally at the moment. To reach net zeroemissions, that needs to be much closer to 100 per cent within 30 years. Sothat’s at least a 100-fold increase ahead, just for vehicles.”
Ms Denholm said that shift would, by 2030, generatea global lithium-ion battery market of $400 billion.
“That’s eight times the revenue generated byAustralia’s coal exports in 2020.
“The opportunity for Australia is extraordinary andnow is the time to seize it.”
Local manufacturing
Among opportunities for Australia were thepotential for greater local manufacturing of lithium batteries and ultimatelyeven electric vehicles, said Ms Denholm, who worked for Toyota Australia in theearly 1990s when the car maker was investing in new Australian factories.
“Mining process currently accounts for roughly halfof the carbon footprint of a battery cell. And the best way to reduce thecarbon footprint of minerals is to stop shipping them across 9000 kilometres ofocean before refining them.
“Take lithium for example. There would be 10 timesless carbon pollution if Australia’s world-class spodumene is converted tolithium chemicals locally in Western Australia.”
Onshoring more refining could lead to majoreconomic benefits, she said.
“Tesla estimates that last year, Australia suppliedapproximately 49 per cent of the world’s lithium ore – spodumene – but 0 percent of the refined product suitable for battery cells.
“That lithium sold for about $US100 million ($129million) – but if it was processed onshore in Australia, the value would havebeen more like $US1.7 billion. So that’s a $US1.6 billion annual opportunityand growing.”
Ms Denholm urged government to step up andaccelerate the transition.
“At the advent of the sustainable energy age, weneed governments at all levels to back Australian mining, back electricvehicles and back battery storage so that together we can seize this enormouseconomic and environmental opportunity.”
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