Australia must not squander the “once-in-a-generation” opportunity presented by the booming demand for lithium-ion batteries and should build a dedicated manufacturing sector instead of sending the nation’s vast amounts of locally mined lithium offshore, federal government ministers have said.

The Morrison government on Tuesday released an Austrade report on lithium – a key ingredient in lithium-ion batteries, which are used in electric vehicles, electronic devices like mobile phones and laptop computers, and to store renewable energy.

Resources Minister Matthew Canavan says it is time Australia took advantage of the booming lithium industry. Credit:Tammy Law

Australia is well-positioned to capitalise on the “lithium-ion battery era”, the report said. Australia has the third-largest reserves of lithium in the world and is the largest producer of hard-rock lithium spodumene.

“At the moment Australia produces about half of the world’s lithium, but once it’s mined out of the ground, it’s shipped offshore, with all of the value-creation activities such as processing and battery manufacturing occurring overseas,” Trade Minister Simon Birmingham said. “Now is the time to accelerate the development of a high-tech lithium manufacturing sector in our own backyard.”