Lithium crash to cost 300 jobs at miner in WA
Story by Peter Milne
• 30m • 2 min readIn this articleAcrash in lithium prices has pushed US miner Albemarle to halve production and stop expansion at its $2 billion lithium hydroxide plant in south-west Western Australia, shed 300 workers and write down the asset’s value by about $1.5 billion.
The move by the $US11 billion ($16.8 billion) company to close one of two operating trains at Kemerton, near Bunbury, south of Perth, and halt construction work on a third train is another blow to minerals processing in the mining state.
In July, BHP closed its WA nickel operation for at least three years, shedding 3000 positions. Frontline workers will be offered employment elsewhere at BHP. Alcoa this year closed its ageing alumina refinery in Kwinana, south of Perth, with about 750 jobs lost.
The price Albemarle – the world’s largest lithium producer – is receiving for its global production has been more than halved in less than a year, from about $US20 per kilogram of lithium carbonate equivalent in the second half of 2023 to between $US12 and $US15.
“The decision was entirely due to market conditions and the commercial realities that lithium prices will stay lower for longer,” an Albemarle Australia spokesman said.
“This has nothing to do with state and federal government policies.”
The $US11 billion ($16.8 billion) company also announced a review of its global costs and operating structure in response to “ongoing industry headwinds”.
Job losses may extend beyond Albemarle’s workforce. Perth-based engineering contractor Monadelphous told the market on Thursday that Albemarle had terminated its contracts at Kemerton, costing it about $80 million of revenue this financial year.
Albemarle chief Kent Masters said the potential for long-term growth of its markets remained strong. This year the company will start exploring for more lithium deposits in WA. It will continue to employ about 460 workers at Kemerton.
Federal Resources Minister Madeleine King said the decision underlined the difficulties in international critical minerals markets driven by market concentration and volatility in demand, including an 80 per cent fall in lithium hydroxide prices over the past 12 months.
King told ABC radio in Perth on Thursday that just a year ago Albemarle was talking about committing a billion dollars to finish the now-stalled third train at Kemerton and also build a fourth one.
“Reality has sunk in after a year, and we have to be really honest about the international market … it is sticking at that low $US10 a kilo mark,” she said.
King said the federal government would consider bringing forward a production tax credit for critical minerals announced in the May budget but not slated to begin until 2027.
“I’ve got no other indication that anyone else is in the kind of trouble that Albermarle is,” she said.
WA’s two other lithium hydroxide refineries are in Kwinana: one owned by Wesfarmers and Chile’s SQM and the other a joint venture between China’s Tianqi and WA miner IGO.
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