The owners of the Greenbushes mine are revisiting a proposal to switch haulage of lithium concentrate to rail.Credit: Ian Munro/The West Australian
Talison Lithium and the State Government are revisiting a proposal to reopen a disused stretch of South West railway to haul the production from the lucrative and expanding Greenbushes mine.
The West Australian understands Transport Minister Rita Saffioti, Talison and rail operator Arc Infrastructure will announce as early as Friday a full feasibility study into reviving the 82km line between the town of Greenbushes and Bunbury.
Laid more than a century ago to support WA’s timber industry, the line was closed in 2000.
However, it now looms as a logical and safer alternative to the use of trucks to haul the increasing volumes of lithium concentrate being turned out by Greenbushes, 250km south of Perth.
A switch to rail haulage would improve safety on the South Western Highway by eliminating up to 200 truck journeys a day and reduce the project’s carbon footprint.
In addition, the reopening would potentially generate opportunities to use the rail line for tourism.
The proposal was last seriously considered before the pandemic, with a pre-feasibility study in 2018 by Talison, Arc and the Government’s South West Development Commission finding the rail option for Greenbushes could be financially competitive with road haulage.
The study envisaged “end-to-end connectivity on the South West main railway corridor” for Greenbushes’ lithium with new infrastructure at multiple locations, including new loading facilities at the mine and Bunbury port.
Reopening the line was costed at about $150 million at the time, but that figure is likely to have increased considerably. Arc, however, would need to make money on the line for it to return to operation.
Talison, owned by a partnership of China’s Tianqi Lithium and US group Albemarle, has spent billions of dollars on expanding production from Greenbushes to meet forecast demand for battery metals from makers of electric cars.
Annual output is running at about 1.5 million tonnes of concentrate, but the group is eyeing 2.8Mt once its plans are completed..
At that level, Talison has estimated the number of road-train trips to and from the mine would dramatically increase to 200 a day.
That has nearby communities worried the increased mine traffic would heighten safety risks on the mostly one-lane South Western Highway, which passes through towns including Balingup and Donnybrook.
The case for a reopening has been considerably boosted by the development of the South West lithium network since the pre-feasibility study, with Tianqi and Albemarle opening value-adding lithium hydroxide plants at Kwinana and Kemerton respectively to take concentrate from Greenbushes.
The expansion of the mine, together with strong prices for lithium on the back of demand, has transformed Talison into one of the State’s most profitable companies.
In 2022, it recorded a $3.2 billion profit from revenue of $5.6b, a result beaten only by recent annual profits from billionaire Gina Rinehart’s flagship, Hancock Prospecting.
Albemarle owns 49 per cent of Greenbushes, with Perth-based IGO an indirect 24.9 per cent owner via a joint venture with Tianqi that also covers the Kwinana treatment plant.
The trio shared $US635m ($917m) of dividends paid in January and February for a total payout for 2022 of $2.4b.
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