Biggest planned battery plant expects demand 'through the roof'
12th April 2019
Resources Rising Stars
Construction will start on Australia's biggest lithium ion battery plant in Townsville next year if an Australian-led consortium secures debt funding when it completes a feasibility study at the end of September (reports The Australian Financial Review).
With annual production targeted at 15 gigawatt hours, the plant in Townsville, in north Queensland, aspires to be more than 100 times bigger than Elon Musk's battery in South Australia, which has a storage capacity of 129 megawatt hours.
The plant, which will cost about $US1.5 billion ($2.1 billion) to build and another $US2 billion a year to operate, is being developed by an Australian-led consortium known as Imperium 3 Townsville.
The consortium is split equally between Australia's Magnis Energy Technologies, a miner of graphite that has expanded into the production of lithium ion batteries; Sydney-based Boston Energy & Innovation, which is chaired by former Macquarie banker Bill Moss; and New York-based C4V, a research group in which Magnis has a 10 per cent stake.
Marc Vogts, a former Rio Tinto and BHP Billiton executive who is now managing director of Magnis, told The Australian Financial Review the consortium aimed to finish a "bankable" feasibility study (which limits any potential cost overruns to 10 per cent) by the end of September and was confident of receiving development approvals. It planned to start building in the middle of next year, with construction expected to take between two and 2½ years.
"We don't believe there is going to be any fatal flaw in the development assessment," Mr Vogts said, adding he was keen to start building as soon as possible so there were batteries available as more people and businesses switched to renewable energy.
"Demand will be through the roof," he said.
The Queensland government is contributing up to $3.1 million for the feasibility study, with additional funding provided by the consortium.
The consortium plans to source debt financing for the plant, which will use graphite from a mine Magnis is developing in south-east Tanzania. once the study is completed.
Townsville Council supports the plant's development and has provided a site in an area identified for a future technology park in return for taking an unspecified minor stake in the project.
It will be 64,000 square metres (the size of eight football fields) and is expected initially hire between 750 and 1000 people.
An artist's image of the proposed new battery plant in Townsville, forecast to create up to 1000 jobs. Magnis Energy Technologies.
The plant, which aims to produce more batteries for microgrids, homeowners and electric vehicles than Australia needs – a plant with capacity of 1 gigawatt hour can produce 200 batteries a minute, 24 hours a day – expects to export batteries to countries such as India.
Magnis chairman Frank Poullas said the plant could be an "enabler" to revive or stimulate industries, such as vehicle manufacturers. "The car industry may come back," he said.
Mr Poullas said the plant's supply chain would not include Chinese companies, to reduce the risk of being caught up in trade wars or unexpected tariffs. "We've specifically left Chinese groups out."
However, Chinese property group Aqualand has taken a 5.8 per cent stake in Magnis via its investment arm, AL Capital. Warwick Smith, AL Capital's chairman, is also on Magnis's board.
The consortium will benefit from a demonstration plant that C4V is building at New York's Binghamton University with a production capacity of between 1 and 1.5 gigawatt hours. The demonstration plant is expected to start operating towards the end of the year.
Mr Vogts said he was encouraged to see Opposition Leader Bill Shorten set an ambitious target of having 50 per cent of all new car sales in Australia electric by 2030 because it "pushed boundaries."
Magnis's board includes Stanley Whittingham, a professor at Binghamton who received a nomination for the Nobel prize for his work on lithium ion technology, and AGL Energy non-executive director Les Hosking.
Magnis reported a net loss of $2.8 million for the six months to December 2018, compared with a loss of $3.1 million a year earlier.
Engineering groups GHD and Douglas Partners have been hired by the consortium to start early works on the plant.
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