A full battery manufacturing supply chain will be operating in Queensland by 2026 after Japanese firms and a local minerals explorer struck a deal to manufacture, market and sell the batteries using inputs mined in the state.
The agreement was announced Wednesday by the Miles government, which wants the locally made vanadium-flow batteries in its power grid to help meet emissions targets.
Vanadium-flow batteries are an alternative to lithium that proponents say are safer, last longer and can be more easily recycled. The raw material used in them is on the critical minerals lists in Australia, the United States and the European Union.
Under the non-exclusive agreement announced Wednesday, Japanese petrochemicals conglomerate Idemitsu and Tokyo headquartered Sumitomo Electric have agreed to manufacture at a new facility in Townsville.
Australia’s Vecco Group agreed to supply vanadium sourced from its site 500km west and converted to vanadium-flow electrolyte at its expanding Townsville facility.
Idemitsu will market, sell, and deliver grid-scale vanadium-flow batteries to Australian customers using Sumitomo Electric Hardware.
The Japanese firms have yet to announced detailed development plans for its manufacturing facility and have yet to disclose its expected total cost.
Premier Steven Miles said the move will help the state reach its emissions reduction target of 75 per cent by 2035 “while creating new blue-collar economy jobs”.
“We know those batteries will provide deep storage into our own grid, but today we are taking it a step further. This means manufacturing the vanadium flow batteries needed in Australia to transition to renewable energy and supplying vanadium electrolyte to the world,” Mr Miles said.
Queensland holds 28 per cent of the world’s vanadium reserves. It is expected to be a key part of the state’s budding battery industry, which could be worth up to $1.3 billion by 2030.
The first stage of Vecco’s electrolyte manufacturing facility is sufficient for annual vanadium electrolyte production for 35MWh of battery storage. It is currently undertaking detailed design for the second stage of the facility, which will increase production to 350MWh.
To accommodate the commercial production facility Vecco has acquired a 3.2 hectare site at Cleveland Bay Industrial Park (CBIP), in the Townsville State Development Area.
In March 2023, Vecco was awarded $26 million from the Queensland government for its electrolyser facility through the Industry Partnership Program, worth around $415.5 million.
The Townsville Vanadium Battery Manufacturing Facility will eventually be supplied by its Debella Critical Minerals Mine, which is currently awaiting environmental approval. The mine and will also produce high purity alumina.
As of March 2023, Idemitsu had a 14.7 per cent share in Vecco Group and has invested about $13.2 million, mostly in support of the Debella Critical Minerals Project.
Townsville will also host a $75 million state-owned common user infrastructure facility for critical minerals, initially focusing on trials for vanadium.
Resources minister and Townsville MP Soctt Stewart said in a statement that the North West Minerals Province potentially holds $500 billion of critical minerals.
“I have always said if we don’t manufacture our future someone else will and this announcement puts Townsville on the path to an even more exciting future.”
In January, the state government announced it would commit $179 million from its Energy and Hydrogen Jobs Fund to test 12 grid-connected batteries, including two flow batteries.
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