The Government will invest in world-leading lithium recovery technology with potential to strengthen our geothermal energy and advanced manufacturing sectors, and contribute to a lower carbon future.
Economic and Regional Development Minister Stuart Nash has announced the new Regional Strategic Partnership Fund (RSPF) will invest in Geo40 Limited, to help scale-up its lithium recovery technology at Ohaaki near Taupō.
“This is a game-changing programme of work,” said Stuart Nash.
“The investment is the first by the RSPF. It delivers on a manifesto commitment to keep supporting regional economic development once the Provincial Growth Fund closed to applications. Regional leaders help set the strategic priorities for RSPF investment, which is seed funding as a catalyst for other investment.
“Lithium is a highly prized element, in much demand for electric vehicle batteries and to help mitigate the impacts of climate change. EVs are expected to account for more than half of new car sales in the northern hemisphere by 2030.
“Overseas, traditional ways of mining lithium leave a heavy carbon footprint. In contrast, the Geo40 programme involves new technology to sustainably recover lithium from geothermal brine, and return the water to the geothermal field. The brine is a watery residue containing mineral compounds, and is a by-product of geothermal electricity generation.
“If we can successfully build up Geo40’s green technology to commercial scale, New Zealand could become an international leader in technology for the sustainable supply of lithium, and help to build lasting action on climate change.
“It could also help meet New Zealand’s 2050 carbon neutral target and create jobs to support the economic recovery. Expanding geothermal energy and advanced manufacturing opportunities in Taupō will be significant to diversify its local economy.
“The region is already renowned around the world as a tourist destination, with one in three jobs tied directly or indirectly, to tourism. Geo40 now offers a chance to further strengthen the regional economy and build more resilience for jobs and businesses.
“The investment of $2 million through Kānoa, the Regional Economic Development Unit, will see the Government take a further equity stake in Geo40 Limited. It will allow the company to progress its lithium recovery method before moving to commercial production.
“By taking an equity stake in the company, the government has the opportunity to share in the upside of the investment, and the company has the opportunity for growth without the additional burden of debt on its balance sheet.
“Geo40 has a proven record of world-leading solutions to recover valuable minerals and elements from geothermal brine. It already exports silica, recovered from the Ohaaki site. The silica technology was also supported by government with a $15 million loan and equity funding from the Provincial Growth Fund in 2019.
“It is a collaboration between government, GEO40, the landowners and kaitiaki the Ngati Tahu Tribal Lands Trust, and power generator Contact Energy. Local government leaders across the region have also helped by endorsing energy and advanced manufacturing projects as priorities for investment from the RSPF.
“There are 215 government-backed regional economic development projects in Waikato, with approved funding of $273 million. Those in Taupō involve large sums, like the $20.6 million redevelopment of the Taupō town centre and $5 million to revamp Taupō airport. Others are more modest, like $142,000 for tourism infrastructure like toilets and kitchen facilities to support camping. And some have the potential to be truly transformational, like the developments at the Ohaaki site,” said Stuart Nash.