Quarterly battery materials market update – November 2024
Thomas Kavanagh, Editor - Battery Materials, provides an overview of battery materials market with key updates on electric vehicles, lithium, cobalt, nickel and more, including:
- EV market update: tariff wars heat up
- Lithium: production cuts
- Cobalt: Chinese exports increase
- Nickel: uncertainty reigns
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Australia should have CBAM on some commodities: Review
Australia should have CBAM on some commodities: Review
Sydney, 13 February (Argus) — Australia should consider introducing a carbon border adjustment mechanism (CBAM), starting with imports of cement and clinker and potentially expanding to products such as hydrogen, steel, and ammonia and derivatives like urea and ammonium phosphate, according to a key report released by the government today. The identified commodities face risk of future carbon leakage from imports, which could lead to greenhouse gas (GHG) emissions being relocated from Australia to overseas. The carbon leakage review , led by Australian National University professor Frank Jotzo between July 2023 and March 2025, assessed leakage risks in 2030 for all 75 trade-exposed commodities under Australia's safeguard mechanism across 42 commodity groups. The review was announced as part of the 2023 reform of the safeguard mechanism While current safeguard mechanism settings are effective at mitigating carbon leakage risk in the short- to medium-term, the declining emissions baselines under the scheme could put some of the identified sectors at a "more significant" risk over time, according to the report. Cement and clinker first, others to follow Risks are higher for cement and clinker, and the implementation of a border carbon adjustment for these products "is likely to be simplest," according to the report. Australian production of lime and glass, on the other hand, is only partially covered under the safeguard mechanism, and a CBAM application would face more complexity. Hydrogen, steel, and ammonia and derivatives carry material carbon leakage risks, but feature more complexity with respect to production methods, supply chains, and product diversity. Some of these products are also only partially covered by the safeguard mechanism. The government should also consider potential risks for a second group of commodities, consisting of aluminium and alumina, refined petroleum, and pulp and paper. These products face mixed evidence related to leakage risk indicators and analysis of trade and investment leakage, but the government could assess them in the forthcoming review of the safeguard mechanism scheduled for the July 2026-June 2027 financial year and consider particularly the suitability of arrangements for emissions-intensive trade-exposed activities for all commodities under the scheme. Preference for fees instead of ACCU surrenders The safeguard mechanism covers over 200 individual facilities emitting more than 100,000t of CO2 equivalent (CO2e) in a compliance year across the oil and gas, mining, manufacturing, transport and waste sectors. Facilities earn Safeguard Mechanism Credits (SMCs) if their reported scope 1 emissions fall below their baselines, and must surrender SMCs or Australian Carbon Credit Units (ACCUs) if emissions exceed the threshold. If the Australian government decides to pursue a CBAM, it should consider applying liabilities only to scope 1 emissions that exceed the relevant safeguard mechanism baseline at the time of import. The assessment should be based on explicit carbon prices only, and the liability should account for the differences between the effective carbon price paid in the originating country and an Australian benchmark price. While importers could, in principle, clear the liability by paying a fee or surrendering ACCUs, there was "broad support" for the fee option during the consultation, according to the report. Surrendering ACCUs would more closely reflect domestic requirements, but trading in ACCUs has legislative requirements that would have to be met by importers which would require careful consideration, the report warned. The ACCU purchase option would create additional demand for the product, raising prices. But stakeholder feedback "reflected concerns about the potential impact on ACCU supply" if these carbon credit units were used to meet carbon border adjustment liabilities. The government should not consider a carbon border adjustment that provides rebates for exports, as that would be inconsistent with Australia's emissions reduction targets and could raise considerable international trade law concerns. "Rebating emissions obligations to exports would effectively exempt production for export from emissions reductions obligations, running counter to overall policy objectives towards net zero and increasing the required emissions reductions elsewhere in the economy," the report read. Teba provisions could be removed Trade-exposed, baseline-adjusted (Teba) facilities operating in emission-intensive sectors that might face unfair competition from imports from countries with weaker or no emission reduction policies currently benefit from discounted baseline decline rates under the safeguard mechanism. Decline rates can be as low as 2pc for non-manufacturing sectors or 1pc for manufacturing sectors, compared with the standard 4.9pc/yr declining rate until 2030. The Teba provisions for a commodity should be removed once a border carbon adjustment is fully implemented for that commodity, according to the review. Limited impact on downstream activity The report also noted that analysis indicates the impact of a carbon border adjustment on downstream activity, such as construction, would be "very limited". "The review's analysis suggests that the maximum price impacts on final goods that incorporate commodities that may be subject to a border carbon adjustment, such as wind farms, house construction and crops like wheat, would be vanishingly small as a share of product prices," the report said. The government said today it will continue to consult on carbon leakage with affected industries, and will consider the report's recommendations in the safeguard mechanism review. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Australia approves Middlemount coal mine extension
Australia approves Middlemount coal mine extension
Sydney, 13 February (Argus) — Australia's federal government has approved a seven-year extension to the life of US producer Peabody Energy and Chinese-Australian producer Yancoal's 4.1mn t/yr Middlemount pulverised coal injection (PCI) and coking coal mine. The two companies will be able to mine coal at Middlemount until 2044 under the proposal approved by Australia's Department of Climate Change, Energy, the Environment, and Water (DCCEEW) on 13 February. The approval is subject to a range of environmental conditions. Yancoal produced 2.6mn t of saleable coal at Middlemount in 2025, up by 12pc from 2024, it said in a quarterly report on 19 January. DCCEEW's Middlemount approval comes less than a week after Peabody Energy restarted longwall production at its 4.7mn t/yr Centurion coking coal mine after an eight-year pause. The company will ramp up production at the mine in 2026, Peabody's chief executive Jim Grech said on 6 February. But Australian coking coal producers are facing challenges. Queensland's state government — which oversees the country's largest coking coal region — downgraded its July 2025-June 2026 coal export forecast because of weak steel output and extended mine shutdowns in December 2025. Australian forecaster the Office of the Chief Economist (OCE) also downgraded its coking coal export prediction for 2025-27 because of adjustments to mine-level production forecasts on 19 December 2025. Australian producers BHP and QCoal closed coking coal mines in Queensland over royalty, pricing, and cost issues in 2025. Other producers may not make many new investments in the state. Major producers are on capital strike, although most are not saying so publicly, investor Gordon Galt told Argus in November 2025. Australian producers exported 147mn t of coking coal out of Australia in 2025, down by 4.1pc from 2024, likely because of mine shutdowns and weather disruptions. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US aims to process critical minerals in Brazil
US aims to process critical minerals in Brazil
Sao Paulo, 12 February (Argus) — The US is interested in developing critical minerals processing capacity in Brazil and is in active negotiations with Brazilian authorities to do so, US assistant secretary of state Caleb Orr said in a press conference late Wednesday. The US sees Brazil as an 'essential' partner in building a resilient Western critical minerals supply chain, and is actively exploring ways to build processing capacity in the country through financing from its Development Finance Corporation (DFC) and technical cooperation, Orr said during the Zoom press conference with Latin American media focussed on last week's critical minerals ministerial meeting in Washington, DC. "Brazil has immensely rich natural critical minerals reserves," Orr said, but the US is focused on heavy rare earths, he signaled. The DFC has recently backed both the Serra Verde and Aclara rare earth projects in the Brazilian state of Goiás. Serra Verde achieved commercial production in 2024, but is expected to increase rare-earths oxide production to 6,500 metric tonnes (t)/yr by 2027 following DFC's investment. Aclara is scheduled to come on line in the second half of 2028, with ramp-up throughout 2029. Both firms produce — or aim to — a mixed rare earth carbonate with an elevated proportion of heavy rare earths, especially dysprosium and terbium, which are key feedstocks to rare earth magnets. "The US is already financing some [heavy rare earths] projects [in Brazil]," said Orr, whose focus is economics, energy and business affairs . "I think it's a natural next step to help encourage processing." The US is in active negotiations with Brazil on critical minerals processing, Orr said, noting that its diversified economy and sophistication would "enable" the US to conduct processing in the country. Brazil, however, would still need to allow the US to develop mineral processing in Brazilian territory. Orr deflected questions regarding whether this would be a topic during Brazil's president Luiz Inacio Lula da Silva's trip to the White House in March, but acknowledged that the US's approach on this matter required "strong partnerships." "We want to get to a great trade deal with Brazil that includes critical minerals," Orr said. "We view Brazil's participation in last week's critical minerals ministerial meeting as a key step forward toward that goal." Brazil has the world's largest niobium reserves, ranking second in rare earths and graphite reserves, third in nickel, and sixth in lithium, according to the Brazilian geological service SGB. The US has already signed critical minerals cooperation agreements with Argentina, Ecuador, Paraguay and Peru. During his press conference, Orr also highlighted Argentina as a key partner for copper and lithium projects. Brazil wants to add processing capacity Processing is a top priority for Brazil's critical minerals industry, as noted by several market participants and president Lula himself. Despite having world-leading reserves of critical minerals, Brazil's potential in this field remains largely untapped. It accounted for less than 1pc of global rare earths production in 2024, for instance. President Lula is willing to allow foreign companies to explore the country's critical mineral reserves, provided they also invest in building downstream facilities that establish an end-to-end value chain within Brazil. "We are not going to be exporters of critical minerals," he said in a speech last November . "If [foreign companies] want [to explore] them, they will have to industrialize in our country so that our country can earn that money." Lula's call for mining industrialization echoes appeals from market participants of the critical minerals industry, especially on the battery materials front. Lithium miners have asked for incentive policies to push for an end-to-end supply chain — and Brazil's newly founded critical minerals association AMC agrees. "Brazil is in a position to become the world's leading critical minerals player, but it lacks the fiscal incentives to do so," [AMC's board president Marisa Cesar told Argus ](https://direct.argusmedia.com/newsandanalysis/article/2759016) . "This leads to other countries offering more favorable economics for midstream and downstream plants than Brazil." By Pedro Consoli Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
ISTA blames lack of investment for Tata UK issues
ISTA blames lack of investment for Tata UK issues
London, 12 February (Argus) — A lack of structural change and investment has caused Tata Steel UK's financial problems, not imports, the International Steel Trade Association (ISTA) said in a letter to government ministers on 10 February. ISTA was countering assertions by Tata that it may have to mothball some operations if imports are not reduced. "We welcome the continued open and constructive engagement of ministers and the Department for Business and Trade [DBT] with our associations; in this regard, we must express our severe concern that these threats being made by Tata do not give them the benefit of undue influence over government's decisions in the way that it seems that they did when they pressed secretary of state [Jonathan] Reynolds last summer," ISTA said. Tata argued last year against a Trade Remedies Authority (TRA) recommendation to impose a 40pc cap on the other countries' quota for hot-dip galvanised coil, leading Reynolds to impose a 15pc cap that stranded months of supply and forced buyers to duplicate orders and book from Turkey. The government intends to make a statement on the new quota regime around 1 April, with implementation from 1 July. Some sources suggest Tata has proposed two quotas per product, one for EU-origin material and one for the rest of the world. Non-EU imports "have always played a vital part of the UK steel market, maintaining a share close to 35pc", ISTA said. Third-country material constituted 25pc of import supply in the first 11 months of 2025, with EU material constituting almost three-quarters, up from 62pc in 2024. The Netherlands was the biggest source, with shipments of 355,168t, almost 27pc of the 1.32mn t total. France was the second-largest supplier at almost 25pc, while Germany and Belgium each supplied around 7pc. Dutch volumes were likely driven by shipments from Tata Ijmuiden to its UK sister company and were the most price-competitive EU volumes, with an average landed cost of £525/t ($715/t). Japan was the lowest-price source in January-November at £458/t, followed by Egypt at £466/t and Taiwan at £473/t. Japanese material has typically been bought into the larger 1B quota for substantial downstream transformation, while a Geneva-based trader has primarily supplied Egyptian material to one service centre in the Midlands. UK strip demand dropped from 5.3mn t in 2018 to 3.6mn t in 2025, while quotas have increased each year, giving imports more market share, a source close to Tata said. Hot-rolled coil (HRC) imports from the rest of the world excluding Europe have risen from 202,490t in 2018 to 308,346t over the first 11 months of last year. South Korea and Japan, which each sell into the 1A and 1B quotas for HRC in the UK, have increased volumes significantly — South Korea from 7,335t to 58,688t and Japan from 21t to 40,718t. "We welcome the support of downstream steel users and agree that any replacement for the current safeguards must work for the whole UK steel supply chain," a Tata Steel UK spokesperson told Argus . "For this reason, the UK industry is pursuing a balanced quota approach rather than a blanket tariff. The global market continues to be defined by significant overcapacity, with excess steel being pushed into export markets. The US and EU have strengthened their trade defences in response. The UK market, on the other hand, continues to be disrupted by low-priced imports and short-term opportunistic behaviour." Since buying Corus in 2007, Tata has invested over £6bn in the UK business. It took both its blast furnaces off line last year and transitioned to re-rolling while its 3mn t/yr electric arc furnace is installed. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.