WR1 General Discussion, page-31863

In laymans terms, the West can't move into downstream conversion chem production as the cost structure is not conducive of such industry outside of China.

Can practically say good bye to Canada hopes of downstream conversion plans and is kaput...so is WR1 just doing to sell DSO to china? Well it is not, so it means Adina can just sit there without being mined because there is not converters in Quebec if Aust can't even get them going in easy to operate W.A


Australia’s efforts to establish a downstream lithium sector were dealt another blow last week when Albemarle (NYSE: ALB) suspended parts of its Kemerton hydroxide plant, south of Perth.
The Kemerton facility was planned to have four 25,000 tonne-per-annum production trains, with the first two being completed in 2022, later than expected and over budget.

Following a review prompted by weak lithium prices, Albemarle suspended construction of the A$900 million Train 3 and will idle Train 2, shifting its focus to the ramp-up of Train 1.

Other market players have had their quota of challenges. Tianqi Lithium and IGO Ltd. (ASX: IGO) have struggled to ramp up their Kwinana hydroxide plant, in an industrial area outside Perth, since it was restarted in late 2021.

IGO CEO Ivan Vella told reporters on the sidelines of the Diggers & Dealers Mining Forum in Kalgoorlie this week that although Kwinana’s performance has improved, it remains a difficult operation.

“If we look into the industry, and obviously Albemarle’s decision, it shows you just how challenged it is,” Vella said. “The margins are very low, and there’s a lot of stress on the industry.”

Canaccord Genuity analyst Tim Hoff told MINING.COM other downstream sectors, including nickel and alumina, had felt the same stress.

“I think that’s going to remain really difficult in Australia. We simply don’t have the right cost structures,” he said. “We simply don’t have the right industry structures to really succeed and place our players well.”

Sector’s wish list

While not in lithium, Lynas Rare Earths (ASX: LYC) has recently commissioned a cracking and leaching plant in Kalgoorlie.

CEO Amanda Lacaze identified two key areas governments could address to assist with Australia’s competitiveness and ensure it became a “critical minerals superpower”.

“Uninterruptible power and plenty of it at low costs at low prices in Kalgoorlie is the absolute top of my list,” Lacaze told reporters at a news conference.

“Number two on my list is once again related to here in Kalgoorlie, which is some really significantly improved logistics.”

Vella said the three must-haves were low-cost and reliable green power, good shared infrastructure and productive workforces.

“And the government should be putting real money on the table to help build out that set of energy sources and all of the relevant infrastructure,” he said.

Cannacord’s Hoff said subsidies or handouts weren’t the answer, but

there were four things he wanted the government to address: infrastructure, power, mining education and tax reform.

“We need a new port here in WA. We need power to be secure. We don’t need the cheapest power in the world, but we need reliable power where people can build 20-year projects and know that they’re going to have consistent power pricing,” he said.

“We do need some tax reform, and I think there is some room to manoeuvre there, and that’s really the financial incentives we want to see that establishes a strong industry – not just a bubble.”

Innovate to survive

Pilbara Minerals managing director Dale Henderson described Albemarle’s decision as a setback.

“The industry’s got a lot more maturing and evolution to come,” he said.

While Pilbara has a stake in a hydroxide plant in South Korea, it is still working on what it calls a “mid-stream” product, or a lithium salt.

“That’s all about chemical processing at the mine site and bringing onshore value but stopping short or some of the complexity which comes with the full chemical process,” Henderson said.

“There’s more innovation, I think, to come and I think Australia should keep working hard on doing what it can to bring value onshore.”