Tag Archives: lithium

Column: Resource-rich Australia shows the strangeness of any super commodity cycle | Instant News

LAUNCESTON, Australia (Reuters) – For those looking for evidence of a new commodity supercycle, and for those skeptical of a sustainable resource boom, Australian government forecasters have covered it.

An autonomous truck prepares to load iron ore at Fortescue Metals Group (FMG) Chichester Hub Australia, which includes the Christmas Creek iron ore mine, in the Pilbara region, southeast of the coastal city of Port Hedland in Western Australia, 29 November 2018. REUTERS / Melanie Burton

The government’s latest Quarterly Resources and Energy Report, released on Monday, describes how some commodities surged during last year’s coronavirus pandemic, as well as how the gains were not comprehensive and may not be easily sustained.

The headline that caught the media’s attention was that the country’s resource and energy exports would hit a record A $ 296 billion ($ 226 billion) in the fiscal year to June 30, 2021.

Australia is the world’s largest exporter of iron ore, liquefied natural gas (LNG) and coking coal, which is used to make steel.

Indonesia ranks second behind Indonesia for thermal coal and third in copper ore shipments, and is a major producer of aluminum and alumina, the raw materials used to make refined metals.

Australia is also the third largest gold producer in the world and the largest net exporter of precious metals, and is a major supplier of battery metals such as nickel and lithium.

The outstanding performance for the country’s resource sector this fiscal year was driven largely by the top iron ore exports, which were estimated at A $ 136 billion, or just under half, of the total export value, according to a report compiled by the Office. Chief Economist of the Ministry of Industry, Science, Energy and Resources.

This is up from the A $ 104 billion iron ore exports in fiscal 2019/20, which was achieved at higher volumes (up 4%) and prices (up 41%).

The massive boom in iron ore revenue is largely a story fabricated in China, the world’s largest importer of steel spent on boosting its economy after being hit by the lockdown imposed to stop the spread of COVID-19.

The Chinese impact can be seen in several other Australian commodities, with copper export revenues up 20% to A $ 12 billion despite volumes shipped slightly lower.

However, it should be noted that apart from iron ore and copper, only the export value of gold increased in 2020/21, to A $ 29 billion from A $ 25 billion.

Australia’s other major resource and energy exports have declined, including LNG, crude oil, alumina, aluminum, zinc, lithium and both types of coal.

Lower prices for most of the fiscal year were largely to blame, although these have started to recover over the past few months.


Much of the commodity super cycle story is built around high demand for resources from China, coupled with a synchronous boost from many other parts of the world as countries act to increase growth through infrastructure spending.

There are also expectations that supply for key commodities will struggle to keep pace, given weak investment spending by producers in response to sharp falls in prices in the early stages of the pandemic.

The Australian government report lends credibility to the demand side of the supercycle vision, but only for the commodities most exposed to China’s industrial strengths, namely iron ore and copper.

While others, including battery metals, are also showing signs of recovery, energy products have been underpinned by temporary factors, such as a reduction in producer production in the case of crude oil and a cold northern winter for LNG.

Where the report becomes more interesting is in its long-term view, which doesn’t see much of a demand-driven super cycle, with Australian energy resources and exports expected to rise to A $ 321.1 billion by 2025/26, a growth rate. a combined annual rate of only 1.7%.

It’s going to be a solid, unspectacular result, albeit far from being a supercycle story.

Digging into the breakdown shows that the commodity reports are expected to be most correlated with the energy transition, with export revenues from lithium expected to surge by about 440% from the current fiscal year to A $ 5.4 billion in 2025/26, while nickel will nearly double fold. to A $ 6.5 billion, and copper up 33% to A $ 16 billion.

In contrast, iron ore, this year’s star to the end of June, is expected to fade by then to A $ 104 billion – the same level as in 2019/20 – while LNG will remain relatively stable and both coal values ​​will decline. .

Overall, the report points out two things, first that the evidence for the emerging commodity supercycle is somewhat mixed, and second that while some commodities are likely to perform well in the coming years, profits will not extend to all.


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Australia’s first pumped hydropower plant in nearly 40 years is nearing financial close | Instant News

Published: 30 Mar 2021, 06:33

The site shows a reservoir, along with the 50MW solar power plant lying behind it. Image: Genex.

A pumped hydro energy storage (PHES) project at a former gold mine in Queensland, Australia that can store up to eight hours of 250MW of power has raised significant funding in recent days.

On March 24, the Australian Renewable Energy Agency (ARENA) said that conditional approval had been given for AU $ 47 million (US $ 35.95 million) ARENA funding to support the Kidston Stage 2 PHES 250MW / 2,000MWh project. The plant is being developed by Genex Power, an Australian Stock Exchange-listed (ASX-listed) power generation development company, which on March 26 said it had also raised AU $ 56 million in two days from equity-raising efforts.

The project involves reusing an ex-gold mine site into an emission-free large-scale energy storage system, converting the two holes in the mine into a lower and upper reservoir to collect water. Dropping water from the upper reservoir to the lower reservoir powers a turbine to generate power during peak times, when off-peak, cheaper electricity imported from the National Electricity Market (NEM) will be used to pump water back through a reversible system turbine.

The entire project includes construction of a 275kV single circuit transmission line from the mine site at Kidston to Mount Fox, some 190 km to the northeast coast. A new power station will also be built at Mount Fox, linking the PHES plant to NEM.

The system will be deployed with a solar PV power plant The 50MW capacity that Genex Power has built on site. Genex is also planning a 150MW wind project, Kidston Stage-3 Wind and another 270MW solar power project, the Kidston Stage-2 Solar project for the site. The promised transmission infrastructure development will also support the interconnection of the two facilities.

Energy removers have been found for pumped hydroelectric plants, the EnergyAustralia utility, and designated EPC contractors. Construction is expected to be completed by 2024, with the construction phase creating around 500 jobs and another 20 permanent roles to be created to operate the plant once it is operational.

Sun image of the site during installation in 2017. Image: Genex.

Financing is close to the target total cost of AU $ 777 million

The entire project – including the construction of the transmission line – is estimated to cost around AU $ 777 million. Genex developers accept up to AU $ 610 million in debt equity pledged in 2019 against costs from the Northern Australian Infrastructure Facility (NAIF), a Commonwealth Government loan facility of AU $ 5 billion established to support economic and population growth and development in the states of the Northern Territory, Queensland and Western Australia.

In February, Genex announced to ASX that the Queensland Government was committed to funding AU $ 147 million for the construction of the transmission line, which is expected to create about 400 jobs during its construction. The funding goes directly to Powerlink Queensland, the company that will build, own and operate the transmission line.

The latest ARENA funding pledge comes on top of the smaller amount made by agencies from the start to support the feasibility study for the project in 2016. Meanwhile, Genex Power launched an AU $ 90.3 million equity increase the same day ARENA funding was announced. The first phase is a placement offer and institutional rights, and after that quick AU $ 56 million hike, the company opened a retail rights offering today (March 30) worth AU $ 34.2 million. Japanese electric utility company J-POWER will become a joint shareholder of Genex and also raise equity.

The first new project in 37 years can be accompanied by another

A 2017 study by the Australian National University found that there is nearly 20,000 potential locations in the country where large-scale hydroelectric power can be developed, throughout New South Wales, Victoria, Western Australia and the Northern Territory.

While most of the world’s existing energy storage facilities are still pumped hydroelectric plants most of which were built decades ago – the US has about 28GW of pumped hydro compared to about 2GW of lithium-ion battery storage – making for a viable hydroelectric project newly built is not easy. .

The need for a location suitable for two large bodies of water, one on top of the other and the high initial capital costs were one of the reasons, although once built, the plant was very cheap, economical and environmentally friendly to operate.

Last year, in a blog for the site, Kowtham raj VS, a member of the Indian government innovation think tank NITI Aayog noted that the lowest renewable energy-plus-storage cost tariff in history was bid in a tender organized by the Solar Energy Corporation of India. (SECI) by a developer planning a large-scale hydropower plant with solar power.

“Pumped storage technology has a very long and predictable service life that socializes capital investment for decades. The number one challenge in pumped storage is location availability. If an excellent water pump location is available, where solar or wind power plants can also be located nearby with a relatively mature transmission infrastructure, pumped storage becomes very attractive, ” Kowtham raj VS wrote on his blog on this site in March 2020.

ARENA noted last week that Kidston would be Australia’s first new pump storage plant built in 37 years. Elsewhere in the country, Oven Mountain, a proposed 600MW / 7,200MWh in New South Wales has considered a Critical State Significant Infrastructure project by the state government.

When the decision was made last October, NSW energy minister Matt Kean noted that a pumped hydropower project could take “about eight years to complete”, stressing the need to act quickly to ensure the benefits of cheaper, cleaner electricity that assets can provide. and the estimated 600 hundred local jobs it will create can be realized.

Another project in development, Snowy 2.0, also in NSW, is even bigger, represents an expansion of the power grid that already includes large pumped hydropower plants. Snowy 2.0’s full output and capacity will be 2GW / 350GWh and similar to Oven Mountain, it has been considered a project of critical significance for the region, this time by the Australian Energy Market Operator (AEMO) under its Integrated Systems Plan (ISP). published late last year. The ISP sets the roadmap for meeting NEM’s long-term goals for decarbonization and reliability.

Snowy 2.0 could cost as much as AU $ 5.1 billion, although the company behind the scheme, Snowy Hydro, the energy utility that owns the power generation assets already on the complex, has committed to financing most of the costs off the balance sheet, along with around AU $ 1.38 billion from the Australian government.

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The Lithium Deal Could Sign An End to the Sino-Australian Trade War | Instant News

China’s demand for lithium and other energy metals to power a growing fleet of electric vehicles (EVs) is proving to be stronger than its anger with Australia over its disputed Covid-19 pandemic claims.

With lithium prices nearly doubling since the start of the year, a Chinese lithium chemical company has prepaid for future shipments of the metal from an Australian mining company.

Sichuan-based Yibin Tianyi earlier this week signed an “offtake and prepayment agreement” with Pilbara Minerals Australia for the supply of up to 40,000 tonnes of concentrated spodumene per year (lithium ore).

The deal has a modest value of just $ 15 million, but it could be one of several signs that the war of words between the two trading partners is naturally fading in intensity.

Yibin Tianyi’s cash will help pay for expanding Pilbara operations, although the lithium from the upgrade is not expected to be shipped to China until the end of this year.

The lithium deal follows previous deals between Australian and Chinese companies over the production of the mineral titanium, mainly used to make paints, and zircon, which is mainly used in ceramics.

Thunderbird Is Go, With Increasing Chinese Money

Yansteel, a subsidiary of Tangshan Yanshan Iron & Steel, last week agreed to pay $ 100 million for a 50% stake in Kimberley Mineral Sands, which is developing the Thunderbird project in northern Western Australia.

Sheffield Resources Australia owns the other half of Thunderbird, which is in the final design and planning stages with investment decisions due later this year

Another clue, this time at the political level, that frozen Sino-Australian relations may thaw is South Australian Prime Minister Steven Marshall’s decision to accept the Chinese government’s invitation to officially open a controversial Chinese consulate in the state’s capital. from Adelaide.

Marshall will share the stage at the March 30 opening with China’s Ambassador to Australia, Cheng Jingye, who has become a harsh critic of Australia after leading a campaign for an independent investigation into the causes of the Covid-19 pandemic.

Despite occasional harsh criticism of each other, China and Australia remain major trading partners with a steady flow of goods and services, particularly minerals from Australia and manufactured goods from China.

The fighting peaked last year when China refused to take several shipments of Australian coal and imposed punitive tariffs on Australian wine, barley and shellfish.

Pain that Fades

The short-term problems for Australian exporters of these products have largely faded with the discovery of new markets.

Some of the barley earmarked for China has reached Mexico. Wine shipments to Britain are booming and coal meant for China is shipped to the Middle East and Pakistan – with commodity traders reportedly reloading and shipping to China.

No winner will emerge from the dispute, which is more about China’s injured pride and Australia’s dislike of China’s attempts to dictate the terms of the relationship.

Economic rationalism and the feeling that it is time to find a way out seem to be mainstream at the moment on both sides, not to mention the Chinese drinkers who prefer Australian barley as a base for beer made by famous brewers like Tsingtao.


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The South Australian government has welcomed approval for a solar storage project worth AU $ 3 billion | Instant News

Victoria Big Battery: a 300MW battery storage project that Neoen is developing in Australia. Image: Neoen.

The South Australian government welcomed the granting of planning approval for the first phase of a large scale hybrid renewable energy project of AU $ 3 billion (US $ 2.32 billion) in the state’s Goyder region.

Developers Neoen are building what has been dubbed the ‘Goyder Renewables Zone’ project in Goyder South; which can include up to 1,200MW of wind generation, 600MW of solar photovoltaic (PV), and 900MW of battery energy storage. Perhaps the most important of these projects is that, when paired with planned interconnectors, the benefits of renewable energy can be shared with neighboring New South Wales.

“This agreement means hundreds of jobs can be created in regional South Australia, boosting the economy as we recover from the global coronavirus pandemic,” said South Australian Minister of Energy and Mines Dan van Holst Pellitif in a statement sent to Energy-Storage.news.

The first phase of the “landmark project” will be up to 400MW in size and the company is “optimistic” that it will be able to start construction early next year, Neoen Australia managing director Louis de Sambucy said in a statement sent to the media including Energy-Storage.news.

The company headquartered in France is developing a number of other large-scale self-contained battery storage projects around Australia as well as renewable energy and batteries paired with renewable energy: these include The Victoria Big Battery 300MW project where the AU $ 160 million debt financing agreement was recently closed with Australia’s national Clean Energy Financing Corporation and Great Western 500MW / 1,000MWh battery in New South Wales. Regarding the Goyder project, Neoen will now shift his direct focus on securing network connections with the transmission operator ElectraNet and the Australian Energy Market Operator (AEMO) market regulator / operator, said its regional managing director.

However, De Sambucy said that in the next stages of adding capacity, Goyder would require approval for the Project Energy Connect interconnector, which will draw approximately 560 miles of power to and from rural South Australia to NSW. 330kV interconnectors are being developed by transmission network operators TransGrid and ElectraNet.

“The Goyder Renewable Energy Zone is an important project that will not only provide a significant boost to the South Australian economy but will also support its transition to a renewable energy-led future. We really appreciate the support the project has received from the Goyder community, the local Council and the Government of South Australia, ”said Louis de Sambucy of Neoen Australia.

“Goyder South will not only support South Australia in achieving its goal of obtaining 100% clean renewable energy by 2030, but will also provide guaranteed income for farmers, as well as jobs to the Goyder region.”

The South Australian government, led by Prime Minister Andrew Marshall, welcomed the multi-stage renewable zone project as a “breakthrough,” calling the planning approval a “massive vote of confidence” in the state government’s energy policy, which it said was already generating AU $ 269 per year in energy cost savings for the average bill payer. Minister of Energy and Mines Dan van Holst Pellitif has announced the project, including its progress closely related to the interconnector, back in September 2019 when building work accelerated.

Minister van Holst Pellitif’s statement greatly emphasized how important it is for the South Australian government to believe that the interconnector project will enable increased use of renewable energy at the lowest possible cost, also demonstrating that the Australian Energy Market Operator (AEMO) has described Project Energy Connect as a “critical, no regrets solution” to keep the lights on in the area.

Minister van Holst Pellivitas said his government was “working with industry” to provide interconnectors and said it “would generate cheaper, cleaner electricity and jobs in the regions”. Interconnectors “are also important for securing projects like Goyder, which can only increase the potential of AU $ 3 billion with the SA-NSW Interconnector,” said van Holst Pelletika.

“If you want investment, lower bills, and action on climate change, you need to support the interconnector.”

The Marshall government also recently approved a solar field in the state proposed by energy retailer Origin Energy that would pair 150MW of solar power with large-scale battery storage. This adds to the existing development path of various renewable energy and energy storage projects in the region.

“It is time for everyone to agree with the Marshall Government’s plan for lowering the bill and stronger action on climate change,” said van Holst Pelletika.

Our sister site PV technology recently reported in the meantime Neoen targets 10GW of renewable energy projects both installed and under construction by 2025.


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UPDATE 1-Contractor asked Australia to review asset sale to Tianqi Lithium China | Instant News

(Change date, add timeline, add contractor’s comments)

MELBOURNE March 11 (Reuters) – An Australian mining services contractor locked in a legal dispute with China’s Tianqi Lithium Corp over a failed payment has asked the Foreign Investment Review Agency to examine the related sale, a company director said on Thursday.

Perth-based MSP Engineering has asked the FIRB to review part of the sale of Tianqi’s Australian lithium business to nickel miner IGO after Tianqi refused to pay him to build a battery-grade lithium processing plant in Western Australia.

This week, the Western Australian Supreme Court ruled that Tianqi, one of the world’s largest producers of the lithium chemical used in electric vehicle batteries, must pay A $ 38.9 million ($ 30 million) in arrears. Tianqi said he would appeal.

The FIRB application comes at a time when trade tensions between China and Australia are rising.

“If we are not completed as part of that sale, then we don’t think it represents the right behavior by foreign investors,” director Craig Burton told Reuters.

MSP has had to stop other lines of business from paying its contractors and subcontractors for months of work and has reduced its staff to four out of 400 employees pending payment, he said.

“This has a bad impact on our business. We just want Tianqi to do the right thing and pay the money spent on the project. “

Tianqi said in a filing on Wednesday that it would challenge the verdict that has given up to March 15 to pay money, including principal and interest. His counter claims included that the project was over budget.

The FIRB did not have any comments yet. The IGO declined to comment.

Tianqi’s assets include a 51% stake in the Greenbushes lithium mine and a 100% stake in the Kwinana lithium plant.

The facility was heralded as the largest of its kind before the first phase commissioning of 24,000 tonnes was halted a year ago as Tianqi flagged liquidity problems due to plunging lithium prices.

The debt-laden company in December secured a strategic investor in the form of Australian nickel miner IGO Ltd for 49% of its business, paving the way for a $ 3 billion loan extension.

Tianqi warned that filing the verdict could adversely affect the liquidity and factory of Kwinana.

The facility is likely to start operating in the fourth quarter of 2021, Daiwa Capital Markets said in a January note, citing Tianqi management at a conference.

Tianqi did not immediately respond to a request for comment about the intended launch date.

$ 1 = 1.2932 Australian dollars Report by Tom Daly and Melanie Burton at MELBOURNE; Edited by Mark Potter and Stephen Coates


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