Andrew Miller: Australia to Play Critical Role in the Global Battery Supply Chain

As the geopolitics of the battery supply chain become increasingly important, Australia will play a critical role in supply, according to Andrew Miller of Benchmark Mineral Intelligence.

“North America and Europe won't be able to meet the upstream requirements for the automakers themselves. So partnerships between nations are going to be more and more important,” he said at Battery Gigafactories Asia Pacific, held in Perth last week.

“I think they're looking for jurisdictions where there's a track record of developing assets of quality mining, and the right type of mining as well. I think you have to look at things beyond just getting the units, it's the sustainability of those units.”

In recent months, the push from governments to build out supply chains has continued to gather pace.

In August, US President Joe Biden signed into law the Inflation Reduction Act, which requires a percentage of critical minerals used in electric vehicle batteries to come from the US or from American free-trade partners. Europe is looking to outline its own Critical Raw Materials Act, which is to be aimed at increasing the EU’s self-sufficiency for critical materials.

“The policy momentum is like never seen before at the moment, in particular in North America, where the introduction of the Inflation Reduction Act promises to have ripple effects far further than just North America,” Miller said.

Over the past few years, carmakers have increasingly committed to electric vehicles, from Elon Musk’s Tesla (NASDAQ:TSLA) to traditional entities such as Ford (NYSE:F). They're also seeing outside support for their electrification goals.

“The multibillions of dollars that we've seen committed to automakers electrifying fleets is now beginning to be matched upstream with partnerships, with joint ventures, with direct investments,” Miller said. “Seeing end users start to reach up out of their comfort zone towards getting further involved in these supply chains is a really positive development for the industry.”

Meanwhile, prices for battery metals rallied in 2021, with high volatility dominating these markets in 2022.

“This isn't the end goal in the industry, these high prices we see today,” Miller said. “I think people have to treat these as a warning sign of what's still to come for the market and for the various aspects of the supply chain over the years to come.”

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.