Japan unveils subsidy to incentivise battery production

Market: Battery materials, Metals
01/02/23

Japan will provide subsidies to businesses that take part in building domestic lithium-ion battery production facilities, either for use in electric vehicles (EVs) or storage systems.

These subsidies will start from late April, the trade and industry ministry's (Meti) battery industry office said in its strategy guidelines released in late January. The ministry is looking to allocate a total of ¥332bn ($2.6bn) for this purpose, aimed at ensuring a stable battery supply chain in the country.

A facility should be capable of producing more than 3 GWh/yr of EV batteries and more than 300 MWh/yr of storage batteries to qualify for the subsidies. Japan in December 2022 included storage batteries in its list of 11 items that are deemed essential for ensuring the country's economic growth, as they are necessary to expand the use of EVs and renewable electricity in line with the country's goal to achieve a net-zero society by 2050.

The subsidies will be disbursed through state-owned research agency Nedo after approval from Meti, which expects to deliver its first round of approvals around late April.

By Yusuke Maekawa

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20/12/24

Viewpoint: Copper volatility, uncertainty ahead in 2025

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Viewpoint: PGM demand from hydrogen sector to rise

20/12/24

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20/12/24

Viewpoint: PGM demand from hydrogen sector to rise

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US Congress passes waterways bill

19/12/24

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19/12/24

US Congress passes waterways bill

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Viewpoint: Europe’s EV future rests on Chinese FDI

19/12/24

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19/12/24

Viewpoint: Europe’s EV future rests on Chinese FDI

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Q&A: Xcelsior aims to derisk minor metals investment

19/12/24

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19/12/24

Q&A: Xcelsior aims to derisk minor metals investment

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Minor metals have multiple end-uses, each with its different market dynamics. You must have a very deep understanding of the commodities themselves, the pricing mechanism, and the material specifications… these supply chains can be opaque. They can be very complex and fast-changing. Being able to navigate them is quite challenging for a lot of more generalist investors. It fundamentally creates a market risk component for critical metals, which can be a barrier. Additionally, many larger mining companies have traditionally avoid these markets because the assets are smaller and may not yield the expected revenue and profits compared with larger copper or iron ore mines. Which metals are on your radar? We are looking very closely at all the major commodities where Wogen has a prominent trading platform, including antimony, tungsten, vanadium, mineral sands, chrome and magnesium. We also are very interested in cobalt, but more on the recycling and processing side. In base metals, we are looking at tin. We focus on those commodities with energy transition links to new demand centres. New demand from sources like solar in small markets can significantly impact overall percentages and returns. For instance, electrification drives substantial demand growth for larger markets like copper, but its impact is smaller than that of markets like antimony. You recently signed an antimony deal with Larvotto Resources in Australia. Could you tell us more about it? We have signed a binding agreement with Larvotto Resources, whose subsidiary owns the brownfield antimony/gold Hillgrove project in New South Wales, Australia. We provided a $4mn loan in return for a seven-year production offtake agreement with Wogen, which will obtain the antimony concentrate from the mine and sell it globally through its customer base. Antimony prices have soared this year in part because of China's export restrictions. Do geopolitics play a significant role in investment decisions? There are large opportunities arising from the dislocation of value chains caused by geopolitics. We're now seeing this almost bifurcation in any material classified as dual-use in China like gallium, germanium and now antimony. This will result in increased volatility. The challenge is that you always want to underwrite projects based on long-term fundamentals, and we still do that. But we see the geopolitical shifts as an upside where we can capture that volatility in our investment strategy rather than rely on it as the sole basis for success. As global trade become more complex, do you see a need for more collaboration across different actors in the value chain? Private-public partnerships in critical metals are an absolute must for the success of western supply chains. One of our big focuses is to work with western groups, including government agencies, to facilitate the reshoring of critical metals and to figure out ways to incentivise new processing downstream. As a standalone investment, they can be challenging. They require very niche capital with great understanding. We are also looking for long-term partnerships with end-users and OEMs to form alliances and secure the supply of materials. There is a big opportunity in this area, but it takes a partnership approach, and that's something that everyone in our industry should prioritise in the next five to 10 years. By Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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