Australia can’t build batteries on its own, says Orica boss

Australia needs to attract an established battery maker if it hopes to compete with global industry superpowers, says Orica boss Sanjeev Gandhi.

Orica's Yarwun manufacturing facility in Queensland. Picture: Orica

Australia needs to attract an established battery maker if it hopes to compete with electric superpowers such as China, Japan and South Korea, according to Orica boss Sanjeev Gandhi, or should instead stick to turning minerals into chemicals to build up downstream processing sector.

Speaking on the sideline of a Melbourne Mining Club address on Thursday, Mr Gandhi – who spent almost three decades at global chemicals major BASF before joining Orica – said Australia had no chance of building electric battery industry from scratch, unless it attracted investment from an existing manufacturer from offshore.

“You’re competing with established value chains in Japan, Korea and China, which have been running this business for the last 30 years. The first laptop computer was built because they had the battery technology in Japan. It was Panasonic who came up with the first portable battery, that was 35 years back,” he said.

“If we are pretending that we’re going to catch up and start making batteries here, I think we’re kidding ourselves.”

The federal government is due to release its critical minerals strategy soon, but Prime Minister Anthony Albanese went to the 2021 election promising to help establish a domestic manufacturing ­sector with the ultimate goal of building electric batteries using locally supplied lithium and nickel.

Orica chief executive Sanjeev Gandhi.

But the chemicals industry veteran said on Thursday he did not believe that was an achievable goal, and Australia should focus on moving a “two or three steps down the value chain” by processing minerals mined in Australia.

“This is not an easy game to play. We need to recognise what our strengths are and stay within those strengths. Otherwise we will make mistakes and a lot of capital will be burned,” Mr Gandhi said.

“If an LG or Samsung or Panasonic comes to Australia and says you have the ore, we’re going to build a factory – fantastic. But where will Tesla build a gigafactory? Not in Australia, in China. There’s a reason for that. Because there’s a lot of ancillary support you need in that industry.”

Mr Gandhi said that although Orica had significant expertise in chemical manufacturing, the company saw its growth opportunities in mineral processing rather than trying to muscle in to more complex parts of the battery and chemicals sector.

“My ambition is to get access to a portfolio of mining chemicals that help in the extraction and purification of future facing commodities,” he said.

“There’s a lot of chemistry that goes into copper purification, nickel purification or lithium. That chemistry is what I’m really looking for in terms of building my portfolio. It could be flocculants. It could be leaching agents. There’s a lot of proprietary chemistry, which is sold on performance, which you use in small volumes for dosage.”

Orica was developing its own in-house capability for more sophisticated reagents at its Melbourne research facilities, but was also on the lookout for potential acquisitions in the sector, he said.

“You need a lot more of that in critical minerals, because by nature they have lower volumes – they are not iron ore or coal. So this means you need very sophisticated chemistry to extract them and then purify them so that they are in usable form that goes into the battery technology. And so that’s what I’m looking at – that sweet spot.”

Orica shares closed down 6c to $15.23.

Originally published as Australia can’t build batteries on its own, says Orica boss