The growing entanglement of Australian companies with the global renewables business – especially in the US – has been underlined dramatically in the $US2.8 billion worth of grants from the Biden administration to push development of batteries and associated technologies.
The US government revealed the grants to 20 companies – three ASX listed and a 4th a ‘mate’ – all of whom have existing or new new ideas for battery minerals, production and refinement.
Three listed Australian companies got grants. Two are Australian – Syrah Resources and Novonix – while the third is Piedemont Lithium, which is listed here but a US business. A 4th is Albemarle, the global lithium giant but an honorary Aussie given it has been very active in this country for several years now as well as in Chile and the US.
The grants are a sign that Australian companies continue to punch well above their weight when it comes to breaking new ground in renewables and that the sector is more than just lithium, lithium and lithium, with a few add on metals.
Australian groups Syrah Resources and Novonix will get close to $US400 million in grants from the American government to expand their leading-edge technology graphite processing and production at plants in the US.
As well the US focused but ASX listed Piedmont Lithium will also get a $US141 million grant for an American lithium processing facility and the ‘quasi-Aussie’ Albermarle also received a grant to help it advance its plans to process lithium in the US.
Syrah shares closed up more than 10% at $2.08. Novonix shares ended 7% higher at $2.28 (but were up 26% at one stage) and shares in piedmont had a nice, 10% rise to 91.5 cents.
The big lesson from this story is that these projects/technologies have been given a thorough examination by the US government’s key energy advisers – yes there are political considerations in some decisions but projects like Syrah’s and Novonix also hold considerable importance for the US as it starts weaning itself of Chinese technologies.
It’s a message being received by a host of other Australian companies – from BHP, to Rio Tinto, Oz Minerals, Pilbara Minerals, Mineral resources, Wesfarmers, Chalice Mining, IGO and foreigners such as Glencore.
The US is determined to exclude as much Chinese products and technologies from the renewables future and Australian companies are well placed to help and benefit.
Syrah and Novonix are in fact two pure Australian companies among 20 manufacturing and processing companies receiving US Energy Department grants to domestically mine lithium, graphite and nickel, build the first large-scale US lithium processing facility, construct facilities to build cathodes and other battery parts, and expand battery recycling.
The projects the companies are building have a value of at least three times the $US2.8 billion in grants and aim to provide the materials to make the US self-sufficient in key battery and electric vehicle technologies, thereby shutting off dependence on China in particular.
Through its Syrah Technologies subsidiary, Syrah will get $US219.8 million which will pay for much of the plant’s expansion. Syrah is listed as putting up a further $224 million pay for the plant’s expansion.
It wasn’t clear whether this grant is in addition to a $US102 million loan Syrah received mid-year from the US to finance its Vidalia active anode material (AAM) plant in Louisiana.
Novonix will received $US150 million which will go towards the $1 billion cost of the proposed synthetic graphite plant with Novonix contributing $US877 million, according to the release.
Novonix Anode Materials LLC (“NAM”) is a wholly-owned subsidiary of Novonix and has developed significant process technology and experience in producing lower carbon intensity, high performance, synthetic graphite targeting the electric vehicle and energy storage sectors.
“Currently, NAM is building its first mass production site in the United States, which will produce 10,000 metric tons per year of battery grade synthetic graphite. The project will build a new plant in Chattanooga to produce 30,000 metric tons per year of graphite targeted at the electric vehicle industry,” the release said.
“The project will use raw materials primarily sourced domestically, leverage domestic technology and equipment suppliers, and enjoy significant involvement from community supporters. The project involves strong partnerships, commitments, and support from domestic technology and equipment suppliers such as Phillips 66 and Harper International, validation partners such as Oak Ridge and Argonne National Labs, and cell manufacturers and automotive original equipment manufacturers.
“NAM will deploy its advanced, cost effective and environmentally friendly process technology to provide a ~60% reduction in carbon intensity relative to the traditional Chinese synthetic graphite,” the statement said (and revealed the real intent of the $US2.8 billion program, to cut China out of America’s battery and EV future)..
Syrah’s grant is aimed at expanding its existing plant in Louisiana. Syrah revealed in April that it been given a $US102 million loan from the US government to go towards the first stage of its plant.
On Wednesday the DOE said “Construction of a new 11,250 metric tons per annum (tpa) AAM facility is underway, with start of production scheduled for the third quarter of 2023. This project (“Phase 3 Expansion”) will expand the production capacity of the Vidalia AAM facility from 11,250tpa to at least 45,000tpa AAM.”
“Upon start of production of the 11,250tpa facility, Syrah’s Vidalia facility will be the only vertically integrated and large-scale natural graphite AAM producer outside China and the first large-scale natural graphite AAM producer in the USA. In 2026, U.S.-based lithium-ion battery manufacturing capacity is forecast to be almost 600GWh, which is estimated to require over 500,000 tpa graphite-based AAM.”
Syrah raised around $A200 million earlier this year from the market to back its US expansion.
Among the other companies involved in the grants, the world’s biggest lithium processor Albemarle will get $US149.7 million to build a facility in North Carolina to lightly process rock containing lithium from a mine it is trying to reopen.
That facility would then feed a separate plant somewhere in the US Southeast that the company said in June would produce as much lithium for EV batteries as the entire company produces today.
Albemarle, which also produces lithium in Australia and Chile, said the grant “increases the speed of lithium processing and reduces greenhouse gas emissions from long-distance transportation of raw minerals.”
Albemarle is in bed with Mineral Resources in WA lithium and has a stake in a refinery in the south which will take spodumene from the huge Greenbushes mine in which it an indirect stake.
Piedmont Lithium’s $US141.7 million will help it build its own lithium processing facility in Tennessee, where the company will initially process the metal sourced from Quebec and Ghana. Piedmont’s plans to build a lithium mine in North Carolina have faced strong opposition from locals.
The funding will support the construction of the company’s $US600 million ($A958 million) Tennessee Lithium project, which is aiming to expand the US supply of lithium hydroxide by 30,000 metric tonnes a year.
