Australia’s downstream lithium sector takes shapePublished date: 24 February 2021Share:After cementing its position as the world's largest producer of hard rock lithium concentrate, Western Australia is striving to become a major producer of downstream lithium chemicals for the battery materials industry through significant multi-national investment.From a zero base, the state could be approaching output of up to 150,000 t/yr of lithium hydroxide by the end of 2024, critical for the manufacture of cathodes for the electric vehicle and energy storage battery markets.Last week's positive final investment decision by Chile's Sociedad Quimica y Minera (SQM) and Perth-based conglomerate Wesfarmers to go ahead with the A$1.9bn ($1.5bn) Mt Holland integrated mine-concentrator-refinery, targeting 50,000 t/yr of lithium hydroxide from the second half of 2024, is a strong vote of confidence in the state's beneficiation strategy following the downturn in the overall lithium market.This Chile-Australia joint venture will add substance to the value-adding efforts of China-Australia pairing Tianqi Lithium and IGO and US-Australia joint venture Albemarle-Mineral Resources, which are already at an advanced stage.Tianqi has already invested A$958mn in a 24,000 t/yr lithium plant at Kwinana, south of Perth. A further $30mn will be invested by Tianqi and IGO to commission the plant later this year, ramping up to full production in the fourth quarter of 2022.Seeing battery material synergies between its nickel-copper-cobalt production and the upstream and downstream lithium sectors, IGO recently agreed to pay A$1.77bn to acquire 49pc in Tianqi's refinery as well as a 24.9pc stake in the giant Greenbushes lithium mine and concentrate operation.Tianqi and IGO plan to spend a further $190mn to add a second 24,000 t/yr train, doubling the refinery's capacity to 48,000t/yr. If all goes to schedule, this expanded output facility should be commissioned in 2024.Well on the way to adding to this growing capacity is the 50,000 t/yr lithium hydroxide plant being developed by Albemarle at Kemerton, about 200km southwest of Perth. Featuring two 25,000 t/yr trains that will also produce a sodium sulphate by-product, this is on track for completion by the end of 2021.Albemarle last year paid $1.3bn to Mineral Resources to acquire 60pc of its Wodgina lithium mine and 750,000 t/yr lithium concentrate processing operation. As part of the transaction, Mineral Resources received a 40pc stake in the Kemerton lithium hydroxide refinery. Although an investment decision is some way off, consideration may be given to doubling the refinery's capacity to 100,000 t/yr depending on demand and broader market conditions.Significantly, there is a possibility that more downstream infrastructure will be added in Western Australia in the next few years as lithium concentrate producers look for better financial returns. Mineral Resources said earlier this month that it is evaluating opportunities to access additional conversion capacity for its lithium operations, including a 50pc stake in the Mt Marion lithium mine that is exporting all of its concentrate to China's Jiangxi Ganfeng.Pilbara Minerals is mulling a downstream joint venture with South Korean conglomerate Posco, but could also look closer to home after it has incorporated its recently acquired lithium concentrate neighbour Altura Mining into its Pilgangoora operations.Other potential downstream players are Neometals, which in 2019 delayed a decision to build a 10,000 t/yr refinery, and Liontown Resources and Core Lithium, likely to become Australia's next lithium concentrate producers.Although the global lithium industry only recently bottomed out from a downturn sparked by upstream oversupply and low downstream demand, there is optimism that sustained market appetite is on the horizon.Wesfarmers chief executive Rob Scott earlier this month said the firm had been reassured about the market for lithium, citing progressing discussions with battery manufacturers which reflected a positive outlook for battery quality lithium hydroxide that is sustainably sourced.While lithium is the biggest recipient, it is not the only battery material attracting investment into downstream processing capacity, enhancing Western Australia's bid to be regarded as a serious supplier of value-added products.BHP's Nickel West unit is pushing the development of a 100,000 t/yr nickel sulphate plant at its refinery south of Perth. This could possibly be enlarged to a 200,000 t/yr production facility. Nickel is the main ingredient in the NCM811 cell technology preferred by some battery and auto makers.Two Perth-based firms in the graphite and high purity alumina sectors are also making considerable headway with projects. Graphite is the main element in the anode of lithium-ion batteries and high-purity alumina provides the separator material between battery anodes and cathodes, increasing power and safety.FYI Resources recently completed successful pilot trials which form part of the conditions for establishing a joint venture high purity alumina project with integrated aluminium, alumina and bauxite producer Alcoa Australia.EcoGraf, which utilises proprietary technology to produce purified spherical graphite, recently said it was fully funded to construct the first stage of a commercial scale battery anode materials purification facility.By Angus Macmillan
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