The silver lining that could recharge Australia's manufacturing

This news was so grim that Queensland MP Bob Katter turned up to Parliament House recently dressed as the Grim Reaper himself. Armed with a plastic scythe and flanked by a procession of classic Holden cars, Katter blamed the government for the death of Holden and Aussie manufacturing.

However, as one door closes another door opens. At the former Holden factory in Elizabeth, South Australia, global battery manufacturer Sonnen has opened a battery assembly plant, employing a number of former Holden workers in the process.

Workers like operations supervisor Craig Johnston, whose parents met at the Holden factory and who worked in car manufacturing himself for 25 years before starting a new career in clean energy in 2018. Craig left the Holden factory on a Friday and returned the following Monday to join Sonnen, helping manufacture batteries under the same roof where he once made cars.

Australia has historically had a large and productive manufacturing industry, but the past 30 years has seen this sector decline. Faced with the dual threats of COVID-19 and climate change, is now the time to revitalise Australian manufacturing?

In 2015, the world committed to act on climate change, with the aim of keeping warming below 1.5 degrees. This commitment has sparked a new industrial revolution in zero-carbon technologies such as wind, solar and renewable hydrogen, and zero-carbon commodities such as steel and batteries. Batteries in particular are going to play a substantial role in the global decarbonised economy, helping to power our homes, stabilise our electricity systems and drive millions of cars and buses around the world.

According to Bloomberg New Energy Finance, global energy storage is set to boom by 2040, and this represents a $662 billion investment opportunity.

The biggest area of energy storage growth will be in lithium-ion batteries, due to their energy density. In the next five years, demand for lithium for the global electric vehicle market alone is likely to increase fivefold.

BNEF anticipates that Australia is one of only 10 countries able to secure three-quarters of this global battery market. The reasons: Australia has the mineral deposits essential to the production of batteries, we are an excellent investment destination, we are an attractive market for small and big scale batteries, and we are close to major markets in Asia.

According to the WA government, Western Australia alone produces nine out of the 10 minerals needed to make lithium-ion batteries.

Now is the time to assertively position Australia as the world's leading battery nation. While we are already the world's largest exporter of lithium ore - spodumene - this just continues our trend of being a "dig it and ship it" nation. A new approach is required if we are to rekindle our manufacturing sector and ensure the full economic value of our resources benefits Australia.

The Australian Trade and Investment Commission found Australian lithium realised $213 billion in the global market in 2017, but only 0.53 per cent ($1.13 billion) of this wealth stayed in Australia.

Most of Australia's lithium is exported to China for processing. Afterwards it is sent to Japan and Korea and transformed into battery packs, which are then imported back to Australia and other countries.

However, in the past two years, we have seen the beginnings of an advanced manufacturing battery supply chain develop in Australia. Western Australia has seen the first lithium processing facility, Victoria the first battery recycling facility, and South Australia the first two battery assembly plants.

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Then of course there are the thousands of households installing batteries, and the energy companies and governments who are following suit at a community and grid scale. In the ACT, the government is running a tender to deliver one of Australia's largest battery storage facilities, able to power 25,000 homes for two hours when needed.

The remaining gaps are battery component and battery cell manufacturing. The good news is that the Western Australian government's battery manufacturing strategy is looking to target the next step - battery cathode manufacturing. Up in Townsville, there is an ambitious plan to establish a battery cell "Gigafactory".

COVID-19 has demonstrated the fragility of many global supply chains. This in turn is leading to a national conversation about the importance of Australian manufacturing.

If we are serious about both increasing our economic resilience to global crises, stimulating the economy, growing new jobs now and into the future and revitalising this dwindling sector, we need to focus on manufacturing for a clean energy future - and an economic stimulus package for batteries would be a great place to start.

Targeted government support now will unleash a global battery powerhouse that drives investment and jobs right across the value chain from mining to refining, making and recycling.

In Europe, a focus on cleaning up transport as a stimulus measure has buoyed the electric vehicle market, and in turn the global metals and minerals markets.

The question is: will Australia take this opportunity to get ahead of the game, or will we persist on shipping our minerals and thus our jobs offshore?