https://www.afr. com/companies/mining/in-wa-a-lesson-in-the-tough-reality-of-processing-lithium-20240304-p5f9od
Opinion
In WA, a lesson in the tough reality of processing lithium
Albemarle’s emerging plant is a living example that reality is much harder than Australia’s rhetoric about more downstream processing in lithium hydroxide.
Jennifer HewettColumnist
Mar 4, 2024 – 6.50pm
Amid the cow paddocks and gum trees 160km south of Perth, 2000 hectares of land are designated as a strategic industrial estate to support heavy industry and downstream processing.
“It’s your opportunity,” declares the large orange sign for the freeway turnoff to Kemerton Industrial Park.
The Albemarle lithium hydroxide plant at Kemerton in WA.
But US lithium giant Albemarle is one of the few companies to have taken up that opportunity in the four decades since Kemerton was set up as a priority industrial area with a buffer zone of another 5000 plus hectares of bushland.
Albemarle’s large chemical processing plant rising up on 80 hectares of land at Kemerton is one of three lithium hydroxide plants now under construction or operating in Western Australia.
These projects are rare evidence that enthusiasm for Australia’s move into downstream processing of critical minerals translates into more than an appealing political fantasy. But the soothing notion of a world going green and decarbonising still requires complex, often hazardous, chemical manufacturing industries.
Albemarle is one of the very few companies in the world that possesses the highly specialised technology and intellectual property to produce lithium hydroxide – a crucial component for lithium EV batteries.
Except for Chile’s SQM, the others are all Chinese and Albemarle itself operates four lithium hydroxide plants in China.
China’s Tianqi and Australian-owned IGO also have a lithium hydroxide facility ramping up operations at Kwinana, closer to Perth. Wesfarmers is partnering with SQM to build another lithium hydroxide plant at Kwinana with production due to start next year.
The quality of the hard rock lithium deposit at WA’s Greenbushes mine – in which Albemarle is a 49 per cent owner along with Tianqi and IGO – persuaded the US company to build its own chemical plant an hour away at Kemerton to further process the lithium spodumene concentrate.
This is also a convenient means of diversifying crucial supply chain materials away from China, which is a sensitive issue in the US and for customers wanting to know the sources of all components. Australia is the world’s largest supplier of lithium.
With the WA plants the only three outside China processing spodumene, delays and big cost increases were inevitable, particularly in a COVID and post COVID era.
Training of a new workforce responsible for a sophisticated, complicated chemical process – along with the need to meet specific Australia’s standards and regulations – is arduous. Albemarle has had to import its Chinese technical specialist teams from China and US engineers to assist with a plant based on a Chinese design.
Construction started in 2019, just ahead of WA’s COVID border closures, meaning its chief operating officer, American Walt Sopp, was stuck in China. But from 2022, the plant has started exporting lithium hydroxide samples to meet car and battery manufacturer standards in markets including Japan, South Korea and soon, the US.
The soothing notion of a world going green and decarbonising still requires complex, often hazardous, chemical manufacturing industries.
On site, trucks deliver spodumene into giant sheds and containers to undergo chemical processes such as calcination and acid roasting at temperatures of over 1000 degrees. Leaching and separating, causticising, crystallising and then packaging complete a two- to three-day process to deliver lithium hydroxide in fine white powder form.
That Albemarle is a $US17 billion globally integrated company and not just an Australian lithium miner makes it less vulnerable to the recent price collapse creating havoc for other WA lithium miners and the odd billionaire. Albemarle’s customers should also benefit from generous subsidies under the US Inflation Reduction Act.
Not that Albemarle is immune to price gyrations. US headquarters must be delighted it pulled out from the contest for Liontown Resources last October. In January, it announced indefinite delay for a fourth processing train, adding to the third being built and the two currently ramping up production.
The goal is still to produce 100,000 metric tonnes a year from Kemerton, supporting manufacturing of 2.4 million EVs elsewhere.
This is on a very different scale to Australia’s reliance on the export of massive quantities of LNG or around 1 billion tonnes of iron ore from WA annually. The global market for lithium hydroxide is currently only around 1 million tonnes a year. But it is still key to Australia’s hopes to encourage more domestic manufacturing.
The shortage of housing in WA means Albemarle has built its own accommodation village nearby for hundreds of temporary construction workers – although the great majority of its 600 to 700 permanent employees are local residents.
What is proving even more complicated is navigating the rules for the basics of shared infrastructure like rail and power in a country that is already extremely high cost.
For all the talk of governments needing to improve approvals and common user infrastructure rather than “picking winners”, Kemerton is an object lesson in the sort of delay and frustration that can only discourage timely, discretionary business investment.
Despite Kemerton’s long history, for example, it still has no rail line to the port of Fremantle. A new government study into a potential rail link between Greenbushes and a (non-container capable) port at Bunbury doesn’t even include a 10km spur to a stranded Kemerton.
Unlike Kwinana, Kemerton still has plenty of land to spare. But it already has inadequate power supply for industry expansion, including lithium hydroxide processing.
That leaves Albemarle helping fund a new power line into the park. Albemarle must pay millions for biodiversity offsets for land required for the 9km transmission line as well as for the plant area itself. That is likely to become more expensive with risks of longer delay once Canberra’s “nature positive” reforms aimed at increasing rather than replacing native vegetation take effect next year.
Note to governments. Downstream processing of critical minerals requires hard business decisions more than soft political soundbites.
(20min delay)