Bill Moss plots $2bn Townsville lithium-ion energy dream
It’s been better known in recent times as the home of the Cowboys NRL team and the implosion of Clive Palmer’s Queensland Nickel refinery. But Townsville is making a bid to become the centre of the new energy revolution as the site for an international consortium to build one of the world’s biggest lithium-ion battery factories.
Amid soaring youth and indigenous unemployment since the collapse of QNI, the Great Barrier Reef tourism and mining centre has entered a six-month agreement with Boston Energy and Innovation, which it hopes will lead to a $US1.6 billion ($2.1bn) gigafactory rising from disused council land by 2020.
New manufacturing hub? The Townsville skyline.
It would be one of the largest factory investments in Australia, capable of turning out one million home-energy storage units a year as renewable energy becomes increasingly mainstream.
According to its proponents, it would also break China’s monopoly of the market through its control of the graphite used by the world’s big four battery makers, and ensure Australia’s energy security in an uncertain world.
“The world is facing trade wars so we don’t want to rely on only one option, if there is a trade war between the US and China,’’ says Bill Moss, who chairs the consortium bidding to build the factory.
The former Macquarie Bank property guru Mr Moss has drawn together the manufacturing expertise of Eastman Kodak with the technology of Nasdaqlisted C4V and Australia’s Magnis Resources, which is developing a high-purity graphite mine in Tanzania to supply a battery factory in the US, and potentially Australia and Oman. It’s already converting an old IBM facility in upstate New York for its first factory and claims that with the additions of the Townsville plant it can become a serious player in the international market in the next three to five years as investment in new battery manufacturing takes off.
“We are not just doing this because we think it is a particularly smart thing to do. We think we can make a considerable dent in the market,” Magnis Resources chairman Frank Poullas told The Weekend Australian. Batteries are expected to play an increasingly important role in the energy market in Australia, with reports to the federal government including last week’s review of future energy security by chief scientist Alan Finkel expected to underpin demand for batteries that would give renewable energy plants the ability to guarantee supply.
While there is no consensus on the demand for batteries, recent reports from groups including oil and gas major ExxonMobil, Bloomberg New Energy Finance, the International Energy Agency and the Grantham Institute at Imperial College point to a substantial rise in renewable energy and battery usage for home storage and electric cars.
Townsville Mayor Jenny Hill says she understands that people might be surprised at the choice of location, given it is best known as a centre for mining and tourism.
“That is one of the aims. We want to bring the new hi-tech industries to the north,’’ Ms Hill said.
She argues that it has several advantages including its proximity to Asia, well established rail and port infrastructure and a young, experienced workforce that is still coming to terms with the consequences of the collapse of Clive Palmer’s Queensland Nickel. “It is quite difficult to build manufacturing in Melbourne or Sydney these days because of the availability of land and the restrictions on movement of trucks in residential areas,’’ Ms Hill said.
“We don’t have those problems in Townsville.”
A development aimed at riding the growth of more environmentally friendly electric cars and storage to help manage the intermittent generation of wind and solar power would also make a counterpoint to Townsville’s status as the intended headquarters for the contentious Carmichael coalmine that Indian group Adani wants to build in the Gallillee Basin.
There are a lot of elements to come together within the 2½ years before the consortium hopes to be in production. Magnis has tested graphite from its mine for production and concluded land purchases. But it still needs to secure offtake agreements and financing before it can develop the mine.
The choice of the location, with the consortium expected to finalise a site by the end of the month, would lead to a full feasibility study before seeking financing and beginning construction.
Mr Moss has had frequent dealings in northern Queensland, and in March struck a deal over vast 360,000ha of land at Cape York to establish tourism and agriculture businesses, with a proportion of the funds going to indigenous trusts for education, health and employment.
A former head of property for Macquarie Group, Mr Moss said the Townsville plant would rely on financial support from all levels of government, but that there were wealthy private backers and companies interested in financing it.
The consortium met with Queensland Premier Annastacia Palaszczuk in April and has a meeting with the federal government scheduled for next month, Mr Moss said. It is investigating whether the project would be eligible for funding from the $5bn Northern Australia Infrastructure Fund, which is overseen by Resources and Northern Australia Minister Senator Matt Canavan, as well as the Australian Renewable Energy Agency.
“This is a way for Malcolm Turnbull to create a new and major technology hub in Australia,” Mr Moss said.
“Australia has a major opportunity to become a world player here, but its up to federal and state governments ultimately, they will make the decision.”
Operating costs in Australia were higher than in other parts of the world with labour more expensive, and energy costs particularly high in Australia compared with the US and Oman, he said. But the high degree of purity of graphite from the Nachu mine in Tanzania with minimal processing gives the consortium a significant cost advantage. “We have to convince the consortium that Townsville stacks up,” Mr Moss said.
Mr Moss expects confirmation shortly from the Townsville Council that it will provide about 80ha of land for the plant, which will have a giant floor area covering around 22ha to produce the lithium ion batteries.
The 15 gigawatt hour factory would be capable of producing 250,000 electric car batteries with a range of 400km, or one million home battery units or to support 300 microgrids to power small towns.
Mr Poullas said the consortium’s factories would help break China’s stranglehold on the global lithium ion battery market. Its producers supply 80 per cent of the global market including major producers LG, Samsung and Panasonic, whose batteries are used in Tesla’s electric cars and powerwall home energy storage kits.
Mr Moss said global instability around trade made it sensible to have other supply option for the batteries, he said.
Demand for lithium batteries would increase very quickly on the back of China’s moving to the use of lithium batteries in cars and with its plans to introduce the energy source to buses and trains, he said.
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