Electric car batteries with a smaller environmental footprint are still possible but international investors are wary after the federal government pulled the plug on a $120 million grant.
Brisbane-based Pure Battery Technologies' planned refinery in Western Australia has lost taxpayer backing despite the Albanese government's push for Australia to be part of the global battery supply chain.
Chairman Stephen Wilmot told AAP the preference is to proceed with the feasibility study as the project "makes sense".
"However, there may be a need to review our decision after discussions with our offshore investors who have expressed surprise at the Australian government’s decision," Mr Wilmot said on Tuesday.
"Many are reluctant to invest in Australia if the Australian government is not demonstrating support for the onshore critical mineral processing industry," he said.
"This is something we might now need to consider in collaboration with our investors."
The grant was awarded more than a year ago to build up onshore processing for battery materials and was axed late last week after failed federal negotiations on changes to the project.
Modern manufacturing grants approved under the former coalition government can still be scrapped if they don't meet requirements, Industry Minister Ed Husic said.
Mr Husic said he expected more project proponents to change their mind on commitments made to secure grants.
"Sometimes those partners change, their commitment changes," Mr Husic said.
"And if it can't stack up, we can't commit more commonwealth funds.
"That's the way it will roll," he told reporters in Canberra.
Mr Wilmot said it was disappointing to see a "stalling of the support for the industry" from the government.
Pure Battery Technologies has an existing refinery in Hagen, Germany, using a leaching process that can refine nickel and cobalt products with a lower environmental footprint than other processing methods.
Spun out from University of Queensland research, the commercially proven method can refine raw materials and recycle from existing battery stocks.
When up and running, the WA hub could produce enough nickel, manganese and cobalt products to support the annual production of 500,000 lithium-ion batteries.
Production in WA was due to begin in early 2025 under previous plans.
Project partner Poseidon Nickel has said it would to continue to provide ore and concentrate samples for metallurgical test work.
