Rio Tinto’s $3.2bn bet on lithium to power electric cars begins on Melbourne’s outer suburbs
Melbourne’s north is home to the mining giant’s $3.2bn global bet on a key ingredient for the green energy revolution.
A little known fact about Bundoora, on Melbourne’s northeast fringe, is that it boasts the highest natural point in the Victorian capital: Mount Cooper, towering at a modest 137m.
An even littler known fact – with perhaps a greater claim to fame – is in this suburb, a few stops from the end of the Mernda rail line, is a laboratory. And it is here where scientists have “cracked the code” of processing a new ore that will help power electric cars well into the second half of this century.
Bundoora may be a world away from the “cradle of the automobile” in Stuttgart, Germany, where engineers at Mercedes and Porsche have been developing high-performance battery-powered vehicles, let alone the Jadar River in rural Serbia.
But it is below this riverbed that snakes through Balkan farmland where Rio Tinto in 2004 discovered jadarite – a high-grade mineralisation of boron and lithium, key ingredients for large- scale batteries, solar panels and wind turbines.
The mining giant has since sent tonnes of the mineral back to its technical development centre in Bundoora to work out how to not only process it but establish a mine in Serbia that will conform to today’s high environmental standards.
It is the culmination of almost three decades’ work. Rio received high praise when it opened the centre in 1992. It still has a framed letter – now hanging in the centre’s conference room – which former prime minister Bob Hawke wrote to then Rio chief executive John Ralph congratulating the company on its commitment to research and development.
“I’m an exploration geologist and it’s not often that they get to find a deposit that a: nobody has ever seen before, and b: that comes to fruition and actually gets mined,” Rio’s minerals chief executive Sinead Kaufman says.
“It all starts in Melbourne. The research and development, starting with the fresh material of how you can process it, and not just process it on an academic level but actually reiterate the process so we can find a really cost effective solution of how we can do that at scale.
“That’s one of the key drivers that allowed us to position yet ours was one of the lowest cost producers of lithium plus the by-products in the world. And that frontier science we’ve been able to do has all been at Bundoora.”
It is good news the company desperately needs after it blew up its board and senior management after destroying a sacred Aboriginal site at the Juukan Gorge in the Pilbara in May last year.
Rio is now in the final stages of receiving approvals from the Serbian government to begin mining the site, with production slated to begin in 2026. Once operational, the mine will produce enough lithium for about one million electric cars a year.
It is also negotiating directly with Serbian landowners rather than relying on the country’s “standard practice” of expropriating land for major projects.
“We’ve taken the position that we would prefer to go and negotiate with people rather than expropriate,” Ms Kaufman says.
“We may end up at the end with some land parcels that we can’t negotiate – examples of some of that we’re already seeing is land where nobody knows who the owner is or land ownership is unclear – and so we’ll continue to work through that.
“But at the moment it‘s going pretty well. We’re still seeing tens of parcels of land every month getting completed as purchases.”
The company has bet $US2.4bn ($3.2bn) on Jadar mine, which it says will see it be Europe’s biggest supplier of lithium for at least the next 15 years. In total, Rio aims to produce 2.3 million tonnes of lithium carbonate over the expected 40-year life of mine.
Already, Ms Kaufman has heard from European battery manufacturers, although Rio is yet to take any orders.
But it may seem odd a team of scientists in Bundoora worked out how to process jadarite. After all, Rio has other research and development centres dotted across the northern hemisphere, closer to the mineral source.
“It’s about capability,” Rio’s executive in charge of technical projects Mark Davies said, adding each research centre provides different skills required for different minerals.
“We do a lot of work and it‘s really a relatively unique set of capabilities and technical skills. So it seems to sort of make sense to be easier to bring the ore to Bundoora than it is to find that sort of experience and skills (elsewhere).”
Indeed, it is a conundrum Rio is facing as it looks to fill 2100 jobs during the construction of the Serbian mine and a further 1000 mining and processing jobs once its operational.
Serbia has one of Europe’s oldest populations, with about one in five of its citizens aged over 65, putting strain on its labour force. But Ms Kaufman says the country is not unique in that regard.
“There are certain skills that are in shortage everywhere in the world and some of that we just have to recognise we‘re going to have to build ourselves,” Ms Kaufman says.
“And we‘ve seen that already, particularly with say geotechnical engineers for underground mining. We see that in Mongolia. I see it even in Canada when we’re recruiting people in mining districts – those sorts of tech specialist skills that we need to expand. Large mines often are things that we have to in a way grow ourselves through experience and training.
“In Serbia, I think we‘ve got some fantastic people we’ve recruited with engineering backgrounds with geological backgrounds as well. We need to continue to work in the country with how we can develop those further skill sets as well as we move forward.”
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