Graphite from Zavalievsky mine in Ukraine

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Recently, Perth-based company Volt Resources Limited re-started their graphite mine in Ukraine and in a recent webinar organised jointly with our member company DGWA, we were able to learn about the logistic and personnel challenges faced by the  Zavalievsky Graphite company in their operations. CEO Prashant Chintawa and Trevor Matthews, Director of Volt Resources, together with Roman Saramaga, CEO of Zavalievsky Graphite, reported on their activities.

Graphite is one of the most important materials for the transition to the green economy, as it is a major component required for the manufacture of anodes in lithium-ion batteries (LIB) for electric vehicles, for example. Currently, China is the major supplier of graphite to Europe, but there is a need for a major diversification of sources, which will be encouraged by the forthcoming European Union’s Critical Raw Materials Act.

The webinar can be viewed on YouTube® at this link.

The webinar was organised by the GABC Raw Materials Focus Group. We shall be organising further events – feel free to sign up for further information.

Volt Resources

Volt Resource announces successful restart of graphite production at their Ukrainian mine

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Australian-based graphite producer and graphite anode materials developer Volt Resources Limited has announced on 8 May that, following the winter stoppage at the Ukrainian Zavalievsky graphite mine and processing plant, in-depth production planning determined a one-month-per-quarter production cycle. Production of graphite subsequently recommenced on 11 April 2023. As of 5 May 2023, over 700 tonnes of graphite concentrate had been produced, including a record daily production of 88 tonnes on 26 April 2023. The average daily production is 54 tonnes with most of the graphite concentrate produced during the campaign achieving 88-96% purity. The Company plans to complete this current production campaign in mid-May 2023.

Volt CEO, Prashant Chintawar, said “Zavalievsky Graphite is a part of our growth strategy, and positions Volt as one of a small number of ex-China graphite producers globally. We congratulate the Zavalievsky team for overcoming many challenges, including power and supply chain disruptions, and personnel availability, to execute our operating plan for 2023 and deliver a very successful restart of the operation”.

Volt Resources is a client of German Australian Business Council member, DGWA based in Frankfurt. They have arranged for Volt to highlight their activities as a supplier of raw materials and their operation in war-torn Ukraine in a webinar on 23 May at 12:00 CEST. Feel free to sign up at this link.

Our raw materials focus group has organised this event. Reach out to us if you are interested in participating.

 

Lithium and the Green Revolution

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The Economist magazine reports on the importance of lithium to the green revolution. Over half of the world’s supply currently comes from Chile, and the government is creating a state-owned company to produce the mineral. Private companies will have to form joint-venture companies in the future with this state-owned company, and the state will have a majority stake. Other Latin American and African countries are planning similar moves. The magazine criticises the current resource nationalism and notes that the nationalisation of companies has had a bad track record in the region, with the companies being mismanaged or corrupt. Extraction of the resources requires know-how, technology, and expertise which is currently unavailable in the region. The trend towards resource nationalism has also affected investment in the industry, as Bolivia (holding the second-largest reserves of lithium) has shown with a decree overturning a planned investment project.

The Economist also reproduces a chart which shows Australia holding a significant amount of lithium reserves, as well as supplies of other critical raw materials for the green revolution. An IMF paper recently estimated that revenues from the extraction of minerals, such as lithium, copper, cobalt and nickel, could rise four-fold because of the increased demand.

At the German Australian Business Council, we shall be looking at the implications for business in the next few months. Sign up for further information.

Mining Excavator

Australian Resources Minister welcomes “like-minded” foreign investors for Critical Minerals Projects

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ExcavatorSpeaking in Darwin, Madeleine King, Australia’s Resources Minister, has reportedly said that Australia will be welcoming “like-minded” investors to invest in critical minerals projects, according to the Australian Financial Review.

The report continues that Minister King did not flag any ban on Chinese investment into the industry, but as the AFR continues, Australian Treasurer, Jim Chalmers, has already indicated that the country would be more assertive in ensuring that investment from abroad into critical minerals projects would be aligned with Australia’s national interest. He has already acted by preventing a major supplier of minerals from China from taking a bigger stake in one company.

At the German Australian Business Council, we are monitoring these developments closely. The recent visit by a German delegation to Australia and the forthcoming European Critical Raw Materials Act will provide an excellent opportunity to deepen relations between our countries.

Australia and Germany to collaborate on critical minerals study

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Australia and Germany will work together to create new opportunities for critical minerals projects in order to meet climate and energy targets. Australian Minister for Resources and Northern Australia Madeleine King signed a joint Declaration of Intent with Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Climate Action, Dr Franziska Brantner, in Perth on Thursday, 6th April 2023.

The Declaration will support a joint study to help Australia meet its ambitions to develop value-added industries around critical minerals, from extraction, refinement and recycling, and to help Germany secure reliable supplies of critical minerals to underpin its manufacturing and recycling activities.

“Both Australia and Germany recognise the important opportunity we have to build diverse, resilient and sustainable critical minerals value chains,” Minister King said. “Australia has vast reserves of critical minerals, which are essential components for clean-energy technologies such as electric vehicles, batteries, solar panels and wind turbines. Both countries have complementary climate, energy and strategic ambitions. The Declaration of Intent with Germany will help us understand which critical minerals are most important to support Germany’s industries and how Australia can be a partner of choice in meeting these needs.”

Minister King will later this year release Australia’s new Critical Minerals Strategy, which will help grow the sector and reflect the important role critical minerals can play in Australia’s commitment to net-zero emissions by 2050.

 

Press Release Australian Department of Industry, Science and Resources

Lithium export boom in Australia

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The value of exports of Australian lithium has boomed in the recent year from AUD 5.2 billion to AUD 18.6 billion, according to figures published by the Office of the Australian Chief Economist.

Global demand for the critical raw mineral is expected to soar in the next few years as the material is used in many advanced products, such as batteries. Australia is one of the world’s key suppliers. Currently, rechargeable batteries use up to 80% of the global demand for lithium and Australia produces 53% of the world’s lithium.

Germany has recently signed agreements with Argentina to improve its supply and we hope that the forthcoming free trade agreement between the European Union and Australia will also encourage trade in raw and processed materials between the trading blocks.

European Union introduces draft Critical Raw Materials Act

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The European Commission proposed on 16 March a comprehensive set of actions to ensure Europe’s access to a secure, diversified, affordable and sustainable supply of critical raw materials. The critical raw materials are indispensable for a wide set of strategic sectors, including the net-zero industry, the digital industry, aerospace, and defence sectors.

Currently, Europe heavily relies on imports from many countries (including Australia) and often from quasi-monopolistic third-country suppliers. The aim of the action plan is to mitigate the risks for supply chains related to such strategic dependencies to enhance Europe’s economic resilience, as highlighted by shortages in the aftermath of Covid-19 and the energy crisis following Russia’s invasion of Ukraine.

The Regulation and Communication on critical raw materials leverage the strengths and opportunities of the European Single Market and the EU’s external partnerships with countries, such as Australia, to diversify and enhance the resilience of EU critical raw material supply chains. The Critical Raw Materials Act will also improve the capacity to monitor and mitigate risks of disruptions and enhances circularity and sustainability.

The Act sets out clear priorities for action: In addition to an updated list of critical raw materials, the Act identifies a list of strategic raw materials, which are crucial to technologies important to Europe’s green and digital ambitions and for defence and space applications, while being subject to potential supply risks in the future. The Regulation embeds both the critical and strategic raw materials lists in EU law.

The Regulation also sets clear benchmarks for domestic capacities along the strategic raw material supply chain and to diversify EU supply by 2030:

  • At least 10% of the EU’s annual consumption for extraction,
  • At least 40% of the EU’s annual consumption for processing,
  • At least 15% of the EU’s annual consumption for recycling,
  • Not more than 65% of the Union’s annual consumption of each strategic raw material at any relevant stage of processing from a single third country.

Creating secure and resilient EU critical raw materials supply chains: The Act will reduce the administrative burden and simplify permitting procedures for critical raw materials projects in the EU. In addition, selected Strategic Projects will benefit from support for access to finance and shorter permitting timeframes (24 months for extraction permits and 12 months for processing and recycling permits). Member States will also have to develop national programmes for exploring geological resources.

Ensuring that the EU can mitigate supply risks: To ensure the resilience of the supply chains, the Act provides for the monitoring of critical raw materials supply chains, and the coordination of strategic raw materials stocks among Member States. Certain large companies will have to perform an audit of their strategic raw materials supply chains, comprising a company-level stress test.

Investing in research, innovation and skills: The Commission will strengthen the uptake and deployment of breakthrough technologies in critical raw materials. Furthermore, the establishment of a large-scale skills partnership on critical raw materials and of a Raw Materials Academy will promote skills relevant to the workforce in critical raw materials supply chains. Externally, the Global Gateway will be used as a vehicle to assist partner countries in developing their own extraction and processing capacities, including skills development.

Protecting the environment by improving circularity and sustainability of critical raw materials: Improved security and affordability of critical raw materials supplies must go hand in hand with increased efforts to mitigate any adverse impacts, both within the EU and in third countries, with respect to labour rights, human rights and environmental protection. Efforts to improve the sustainable development of critical raw materials value chains will also help promote economic development in third countries and also sustainability governance, human rights, conflict resolution and regional stability.

European countries will also be expected to adopt and implement national measures to improve the collection of critical raw materials rich waste and ensure its recycling into secondary critical raw materials. European countries and private operators will have to investigate the potential for recovery of critical raw materials from extractive waste in current mining activities but also from historical mining waste sites. Products containing permanent magnets will need to meet circularity requirements and provide information on recyclability and recycled content.

International Engagement

Diversifying the Union’s imports of critical raw materials: The EU will never be self-sufficient in supplying such raw materials, and will continue to rely on imports for a majority of its consumption. International trade is therefore essential to supporting global production and ensuring diversification of supply. The EU will need to strengthen its global engagement with reliable partners to develop and diversify investment and promote stability in international trade and strengthen legal certainty for investors. In particular, the EU will seek mutually beneficial partnerships with emerging markets and developing economies, notably in the framework of its Global Gateway strategy.

The EU will step up trade actions, including establishing a Critical Raw Materials Club for all like-minded countries willing to strengthen global supply chains, strengthening the World Trade Organization (WTO), expanding its network of Sustainable Investment Facilitation Agreements and Free Trade Agreements and pushing harder on enforcement to combat unfair trade practices.

It will further develop Strategic partnerships: The EU will work with reliable partners to promote their own economic development sustainably through value chain creation in their own countries, while also promoting secure, resilient, affordable and sufficiently diversified value chains for the EU.

Next Steps

The proposed Regulation will be discussed and agreed by the European Parliament and the Council of the European Union before its adoption and entry into force.

The German Australian Business Council will monitor the progress of the act.

Mining LandscapeDominik Vanyi on unsplash.com

Critical Raw Materials

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The Economist magazine reports on the supply of critical raw materials, such as lithium, aluminium and cobalt. Many of these are supplied by countries with unstable governments, such as the Congo, or subject to sanctions, such as Russia.

Over the past few years, mineral resources have been discovered and increasingly exploited in Australia. The country is now becoming one of the suppliers of critical raw materials to industry in Europe, as the Economist highlights.

At the German Australian Business Council, we encourage the development of business relations on both sides of the globes, and we see the supply of critical raw materials as an important factor in strengthening the relations between our two countries.

If you are interested in finding out more about activities, then sign up here.