...our mine operating cost is higher than likely in China, South America and Africa, now Ken Masters is sounding dumbfounded that our workforce capability is somewhat falling short for a more optimal production....which sounds rather concerning if we are to be competitive going forwards with ramping of global lithium production in the emerging economies of the world.
Chinese technicians parachuted in to fix ailing WA lithium plantBrad ThompsonReporter
Feb 27, 2024 – 2.03pm
Albemarle chief executive Kent Masters says the company has flown in workers from China to get its troubled lithium hydroxide plant in Western Australia running properly.
New York-listed Albemarle said the Kemerton plant, built at an industrial park about 180 kilometres south of Perth, was
operating at about 50 per cent capacity and still not producing a hydroxide product approved by its battery customers.Australia’s other lithium hydroxide plant, owned by China’s Tianqi and locally listed IGO, has also failed to live up to expectations.
Mr Masters said Albemarle had underestimated workforce issues in WA that have hobbled the first two lithium hydroxide plants built outside China, which dominates processing of the critical mineral.
“
China is good at this … there’s a machine in China that’s just very good at this,” he said. Albemarle was now training the Kemerton workforce “more or less from scratch for chemical processing”.
Billionaire Minerals Resources boss Chris Ellison has claimed partner Albemarle spent “well north” of $US1.5 billion ($2.3 billion) against its originally budgeted $US1.2 billion to build the first two 25,000-tonne-a-year production trains at Kemerton.
MinRes received $US383.6 million from Albemarle to absorb its share in Kemerton, but they remain equal partners in the Wodgina lithium mine.
Mr Masters, speaking at the BMO Capital Markets conference, said Albemarle’s experience showed
WA did not have the chemical processing capability needed to build and operate at the level of technical proficiency required.“So we’ve gotten help now. We can bring people in, we bring teams from China. We bring engineering from the US to support that.
We underestimated the workforce,” he said.
Train 1 at Kemerton is operating at about 50 per cent capacity and producing material in line with specifications but needed the “final tick” from customers to be classed as a qualified product.
It is 18 months since Albemarle started the ramp-up and qualification process at Kemerton. The company, which pulled a $6.6 billion takeover offer for Liontown Resources last October and has since
cut back investment plans in WA, expects a much faster ramp-up for train 2.
The Tianqi-IGO plant at Kwinana near Perth is operating at a fraction of its 24,000-tonne-a-year nameplate capacity, producing just 617 tonnes in the December quarter.
Both Albemarle and Tianqi have built and operated lithium hydroxide plants in China with none of the apparent problems and cost blowouts experienced in WA.
Wesfarmers, meanwhile, remains confident it can deliver on a third lithium hydroxide plant under construction in WA in partnership with Chilean lithium heavyweight SQM.
Mr Masters said Albemarle and its partners in the Greenbushes mine, Tianqi and IGO, were trying to get more efficient when it came to decisions around reducing capital expenditure. MinRes last week outlined plans to limit production at Wodgina, one of the world’s biggest producing lithium mines.
Mr Masters said supply was coming out of the market in response to low prices but at a slower rate than Albemarle expected. The outlook could depend on the performance of China’s producers of lepidolite, which is an alternative source of extracting lithium.
“More has to come out, and I think it’s happening. You can’t turn on a dime. People have been holding in there, and we’ll see,” he said. “I think the real driver is going to be the higher cost supply in China. That’s a pretty big volume and typically lepidolite based. We’ll just have to see how that comes out.”
