Hynes adds to make things more daunting, Australia is up against some mature developers in other markets, particularly China. Add into this the support the governments of nations such as Indonesia and the Philippines are offering to their own industries.
Part of the problem facing Australia is its distance from some of the major markets can reduce easy access to the best people and latest technology.
“Getting the expertise and the people here is one key issue at the moment. Labour markets are tight and availability of that type of expertise is relatively small,” Hynes says.
“Building those types of facilities in in Australia, where you are generally outside of the real manufacturing hubs globally, means the costs can tend to be a little bit higher here. The moves to partner up with people like the US in particular, could potentially help accelerate that.
“But just our general distance from some of the major markets makes everything just a little bit more difficult.”
Price instability, expect the unexpected
Another factor that needs to be considered is the variability of the price Australia gets for its raw materials.
As the market develops for the raw materials that go into EV batteries, from nickel, lithium, cobalt, copper manganese ore to rare earths, there is a push and pull between things like short term demand and the long lead in time a lot of these projects require.
There are questions of whether these could lead to an elongated period of price instability.
“You get periods where the market is quite bullish on demand and as a consequence you can't see supply matching that over whatever period you are viewing. And that's the mismatch of expectations both on supply and demand (which is) quite significant at the moment,” Hynes says.
This all impacts the EV market. In recent years the take up of EVs has increased as the price has come down. Most of that was due to rapid technological advancement matched with mass production.
“We’re also now seeing the consequence of that potential dislocation within the raw material market playing out in terms of prices,” Hynes says. “And for the first time in many, many years, we've started to see lithium battery prices increase, which is just a result of the rising expectations of really strong demand.
“For EV markets, they're going to have to contemplate a period where costs for some of those key materials are going to potentially rise again.”
EVs are one example of how to transform the use of raw materials but what of the overall desire for Australia to become a “renewables powerhouse”? Is this even a feasible goal given all the different working parts of an economy that have to coalesce to reach that goal?
Hynes says this will depend upon Australia’s ability to feed these new manufacturing plants with locally available and cheap renewable energy.
“I think it's a quite achievable goal over the longer term and certainly one which I think a lot of industries are heading towards pretty quickly,” he says.
“For the EV market, or even other sort of sectors, being able to position the processing or manufacturing in areas where the renewable energy is sourced from will be a key to that because, certainly in terms of solar and wind and the like, it is a lot cheaper and easier to use that energy right at the source rather than transporting it long distances.”
“If Australia can develop that side of the market [for example manufacturing hubs] along with obviously having the great resources that we do, then we can be a key part of that value chain.”
ESG, the place to be
Hynes also says the nation’s ability to do environmental, sustainability and governance (ESG) standards well could be a key benefit in coming years.
Jeff Whalley is Senior Journalist at ANZ