05 July 2017

Battery Gigafactory Global Consortium Investigates Financial Viability of Townsville

Townsville City Council (TCC) has announced they are buying an equity stake in a global investment consortium using council land to build and operate a foreign owned $2 billion battery Gigafactory at Woodstock.

The Council owned land is 40 kilometres west of Townsville on 400 hectares that included the former CSIRO Lansdown research station.

Former senior executive of Macquarie Bank and Chairman of Boston Energy and Innovation (BEI), Mr. Bill Moss said "the consortium is committed to transforming Australia's energy supply."

A similar size battery "Gigafactory" is planned for New York state located at the Huron campus, the home of the computer hardware giant IBM.

The global players

Image: Boston Energy and Innovation (BEI) Chairman, Mr. Bill Moss
Photos thanks: The Australia
The major players in the Townsville Battery Gigafactory investment consortium include:
  • Magnis Resources Limited
  • Eastman Kodak Company
  • C4V incorporated
  • C&D Assembly incorporated
  • TCC Development Corporation
In a statement to the Australian Stock Exchange (ASX), the consortiums Australian player, Magnis Resources said: "BEI is an ethical investment house specializing in the establishment of sustainable energy storage solutions in an environmentally sustainable manner to curb future energy problems faced by countries worldwide".

The TCC announced that a Memorandum of Understanding (MoU) was signed in April 2017 and that a "beneficial enterprise" development corporation has been established to legally share in the industrial development venture proposing the 15GWh battery manufacturing plant at Woodstock.

Economic benefits

"Townsville has increased the stakes to secure a state-of-the-art battery manufacturing plant and thousands of new jobs with a land offer that will deliver a major return for ratepayers," TCC reported.

The consortium estimates that the facility will create up to 1000 direct jobs and an additional 1000 in new jobs in direct support businesses and up to 5000 jobs in downstream original equipment manufacturing. The plant, once it is completed, could produce 250,000 car batteries per annum, 1 million home battery units or support 300 micro-grids to power small towns.

In an exclusive interview with the Townsville Bulletin, Cr. Hill stated: "the council was working closely with the consortium to meet its requirements for the project with land, power, transport links and workforce availability."

BEI Director, Mr. Corey Cooney said "We are also meeting with Minister Lynham as part of a push to create a new advanced manufacturing hub and smart technology and innovation base here in Townsville. We believe that a battery manufacturing plant is an anchor for that."

In a statement to Magnis Resources, Mr. Cooney said: "The consortium is committed to transforming Australia’s energy security by pledging the new batteries will be cost competitive, better performing, a sustainable supply chain, environmentally friendly and an alternative to current major energy suppliers."

Council land commitment

Ms. Young approved the announcement of the joint venture just this week 2 months after the MoU was signed and announced by the Australia/USA consortium on the New York Stock Exchange.
Image: TCC map of land proposed for Battery Gigafactory
"The TCC today approved a planning report recommending the council offer a portion of land at Woodstock for the proposal which is backed by a consortium led by BEI", the TCC press release stated.

"The land is part of the former CSIRO Lansdown research station, purchased by the council in 2002 to provide for future industrial uses.

The private investment consortium has been considering multiple sites proposed by TCC around the City requiring an area of at least 20 hectares. The 400 hectare Council owned site at Woodstock has rail transport, power and optic fibre services essential for a Gigafactory.

"Under the proposal, the Council would exchange the land for equity in the project that would be controlled under a specially set-up Council business entity and provide the city with an ongoing financial return," Ms. Young stated.

Reportedly a personal friend and mentor to TCC Chief Executive Officer Ms. Adele Young, Mr. Moss says these Gigafactories will be the "first of a series of proposed lithium-ion battery manufacturing hubs globally."

Battery energy and mining race

At least ten battery Gigafactories have been revealed in the past six months. Half a dozen have been planned in the last month across the world including the USA, Germany, Sweden, Hungry, Poland, China, Thailand and Australia in Townsville and Darwin.

Image: President Donald Trump Unleashing American Energy policy
Photo thanks: Hot Copper
The most aggressive player and inventor of the battery Gigafactory is the US billionaire and electric car manufacturer, Elon Musk who produces the Tesla car.

A global race for resources in cobalt and lithium is underway to supply the massive explosion in battery Gigafactories worldwide. Reducing the price of battery energy production and storage is critical to the global supply chain seeking cheaper electric cars and solar energy capture and storage solutions.

If the Queensland and Townsville governments are smart, they will position themselves in the negotiations with MoUs in hand from downstream manufacturing suppliers too.

A deal with an Aussie electric car maker or smart home manufacturing consortium, leveraging Australian engineering, could bring an unbreakable proposal to the global battery manufacturing consortium.

Critical to the plant's success is the anode material used in the manufacturing of Lithium-ion batteries.

Magnis Resources "plans to provide the materials from its Nachu graphite project in south-east Tanzania, which is planned to produce roughly 240,000 tonnes of graphite concentrate annually for a 15-year mine life from 2018."

Is the local leadership up to the task?

With such consumer demand making the offtake financing option key to the investment deal, competition across the globe for this new technology puts the leadership of Townsville in an extraordinary position of great opportunity.

From Townsville's perspective, focusing on stimulus jobs is a long game that builds on securing sustainable new age industries that could position the "Woodstock-Giru Valley" in the global gold rush for clean energy.

Image: Townsville City Mayor Cr. Jenny Hill
Photo thanks: Townsville Bulletin
The TCC land value equity stake could be the start of a portfolio of land/equity deals with an Australian owned and operated Tesla-like business model that could see the modern day Holden Ute back on the streets.

Selecting a suitable site showed the consortium behind the proposal the city was ready for business. “We have to make sure we keep the momentum going behind our negotiations and the fact that we now have a suitable site is a big step forward,” Cr. Hill said.

“The battery plant has the potential to create enormous economic benefits for the city and we are doing all we can to make it stack up.

“In addition to thousands of direct and indirect jobs, taking equity in the project in exchange for the value of the land will generate an on-going revenue stream for ratepayers.

“There is a still a long way to go in our negotiations, but the council is acting quickly to seize the opportunity.”

"In April, the council signed an exclusive MoU with a consortium led by BEI chairman Bill Moss AO which includes ASX Listed Magnis Resources and backed by US companies Eastman Kodak, C4V and C&D Assembly to investigate the financial viability of building a 15GWH battery manufacturing plant in the city," the TCC press release stated.

The consortium is investigating Townsville for the Gigafactory site "because of its infrastructure, location and it forward thinking council."

In a recent statement to the ASX, Mayor Cr. Hill's said, "This proposal if it comes off will be the biggest single stimulus for jobs and economic development in Townsville in decades".

"Townsville's economic fundamentals are strong and the hard work we're doing to sell the city's potential and attract potential investors is paying off and was the reason the consortium has come to the city," Cr. Hill said.

The Gigafactory plant could be operational in just 3 years supplying the car, home energy and utility battery markets but the Townsville bid is still competing with a site in the Northern Territory.

Further reading:







Free Subscription Offer

Click on image to join TREN
How to stay up-to-date

Do you have an opinion about the Battery Gigafactory?

The TREN community wants to hear your story.

Become a subscriber to TREN eMgazine and be the first to receive local breaking stories, analysis and opinions on the Townsville real estate market.