[ferro-alloys.com]The global explosion in demand for batteries will power WA mining but is unlikely to deliver a new manufacturing industry to the State, a special investigation of the burgeoning sector has found.

To be released today by the Chamber of Commerce and Industry and the Chamber of Minerals and Energy, the report says WA should “play to its strengths” by focusing on the production of key lithium-ion battery minerals.

While urging the State Government to consider lower royalty rates and calling on the Federal Government to revoke its recent cap on small business research and development tax incentives, the report says the idea of a WA battery industry may be unachievable against strong competition from China and elsewhere.

Lithium production in WA is expected quadruple by the middle of next decade on the back of soaring demand for batteries in everything from electric cars to solar power stations.

There have been some calls for WA to not only refine the raw mineral but also go into battery production as a way of diversifying the local economy.

But the report suggests there are huge risks in supporting a battery manufacturing industry in a small market such as Australia that would have to compete against firms based in China and north Asia that have decades of experience.

It also says a local battery presence would be competing against State-owned businesses that may benefit directly from government-funded subsidies.

Chamber of Commerce chief executive Chris Rodwell said there were lessons to be learned from the iron ore industry.

He said it was not a “dig-it-and-ship-it” mentality but there were other parts of the battery production chain where WA could use its natural advantages.

“Even though WA is the world’s largest exporter of seaborne iron ore doesn’t mean we are competitive in producing steel,” he said. “The same goes for lithium and being competitive in manufacturing lithium batteries compared to other more established nations.”

One proposal backed in the research is a new royalty rate for higher grade concentrates of between 5 per cent and 2.5 per cent in what it says would recognise the cost of investment to process the product.

A planned Future Battery Industries Cooperative Research Centre should be based here because of WA’s role in lithium and other battery minerals.

It also calls on the Federal Government to overturn its recent move to cap at $4 million cash rebates for small businesses under its research and development tax program.

CME chief executive Paul Everingham said there were already signs current and planned investment in processing would lead to minerals being converted into chemicals. “WA is positioned to capitalise on opportunities for lithium hydroxide and nickel sulphate production, and potentially cobalt sulphate production,” he said.

（West Australia）

• [Editor:王可]