Australia’s growing lithium demand dependent on global climate action: Treasury report
Global demand for Australia’s lithium is predicted to increase rapidly over the coming years, with the amount required based on how fast the world moves to limit climate change.
Australia’s position to take advantage of the demand for critical minerals could also be even stronger than anticipated, with about 80 per cent of the continent under-explored, the updated intergenerational report being released on Thursday highlights.
The report offers an assessment of the economy over the next 40 years and how changing demographics and other factors would interact with existing government policies.
It identifies critical minerals and advanced manufacturing as big opportunities to grow the economy over that timeframe.
In particular, it highlights the potential for lithium. Australia is already the world’s largest supplier of the key component of batteries and electric vehicles, but China is the largest processor.
“Even if global action is only sufficient to limit temperature increases to 3C, global demand for lithium is projected to quadruple,” the report states.
“If global actions are consistent with limiting temperature increases to 1.5C, global lithium demand could be more than eight times larger than current levels by 2063.”
The report also notes Australia is one of the few countries home to all three key elements of the aluminium industry, which is also important to the energy transition along with offering a more sustainable building material.
Resources Minister Madeleine King said there would need to be more mining, not less, for Australia and the world to confront the challenges of climate change.
“The world will need our critical minerals to build the batteries and wind farms and solar panels needed to power the energy transition,” she said.
Treasurer Jim Chalmers said it was vital for Australia to seize the opportunities in processing.
“We have the chance to do more than just rip and ship our minerals – we can mine, refine and manufacture them as well – creating more jobs and more opportunities for more Australians into the future,” he said.
“This is our big chance and our big opportunity to deepen and broaden our industrial base and usher in a new era of economic prosperity for our country.”
As well as the opportunities associated with decarbonisation, the report also explores the economic risks of climate change, warning that WA could be the hardest hit by temperature rises across Australia.
If the global temperature rises by 4C, the direct impact of people not being able to work as much because of the heat could cost the economy as much as $423 billion by 2063.
Under that scenario, Average temperatures in WA are forecast to rise by more than in other parts of the country.
“This suggests Western Australia could be more directly affected by the labour productivity impacts of higher temperatures than some other Australian states and territories,” the report says.
Crop yields would be lower, the threat of erosion on beaches and degradation of natural attractions would undermine tourism, and natural disasters – along with the economic hit from the destruction they wreak – would become more frequent.
Dr Chalmers said the grim assessment underscored the importance of responding to the threat of climate change.
Source: News
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