IGO and Wyloo Metals are exploring a battery materials operation potentially worth up to $1 billion at the Kwinana industrial strip, south of Perth.
It is understood the facility would be the first of its kind in Australia, integrating a downstream nickel refinery with a plant producing a high-value, nickel dominant material used in lithium-ion batteries.
Friday’s announcement, revealed by The West Australian, follows calls from mining companies including Chris Ellison’s Mineral Resources and Tim Goyder’s Liontown Resources for greater investment in downstream processing to unlock more value in battery minerals supply chains.
The McGowan Government is providing the land for the project, agreeing to lease a 30-hectare site adjacent to the Kwinana lithium hydroxide facility owned by IGO and Tianqi.
It is expected to cost between $600 million and $1b and employ 1200 people during construction pending a final investment decision. This would depend on a feasibility study, expected by mid-2024, and other milestones being achieved, including bringing on a third partner.
Deputy Premier and State Development Minster Roger Cook said the Government was backing projects that would help WA decarbonise and set the economy up for future success amid the global energy transition.
The facility would produce so-called “precursor cathode active material” combining nickel with cobalt and manganese. The product is then combined with lithium at another location before going into batteries, which are essential components of electric vehicles.
The project will source feedstock concentrates from IGO’s own assets — potentially from its Cosmos nickel mine near Leinster, due to be completed later this year — and third-party suppliers.
The battery minerals miner would own 70 per cent while Andrew Forrest’s Wyloo — which has made a $760m play for Kambalda nickel miner Mincor — would own the remaining stake. Wyloo could use feed from the takeover target if its bid, which has the backing of the Mincor board, is successful, but declined to comment on its plans.
IGO and Wyloo are searching for a company with experience in production of the PCAM material, which requires a specialised skill-set. They said they were advancing discussions with a global battery chemical manufacturer who had indicated a “strong interest”.
The partnership between IGO and Wyloo came about as a result of IGO’s $1.1b takeover of Western Areas last year. Wyloo agreed to sell its 9.8 per cent stake in the latter to IGO in exchange for a deal that would see the companies collaborate on future opportunities for nickel downstream processing.
IGO acting chief executive Matt Dusci said Australia needed to continue to expand its participation throughout the battery supply chain beyond the mining of raw critical minerals. “We believe the area where Australia can be most competitive is in mid-stream battery chemical processing,” he said. “We strongly believe that by bringing the right partners together, we will deliver a fully optimised nickel supply chain delivering low-cost, low-carbon, responsibly produced battery chemicals for the global battery and electric vehicle industry.”
Wyloo chief executive Luca Giacovazzi said he was excited to build on the “immense potential” in WA, noting areas such as Kambalda and Leinster hold some of the world’s highest-grade nickel. “WA is already a leading supplier of critical minerals, and this is the spark it needs to become a global hub for battery metals. There’s a huge opportunity to grow the industry and Western Australian jobs by supporting the world’s transition to electric vehicles,” he said.
The McGowan Government also announced the upcoming State Budget would include $35m to top up its industrial land development fund, taking the total value to $135m. “We know that the Kwinana-Rockingham (strategic industrial area) is prime real estate for advanced industries such as PCAM,” Mr Cook added. “With the potential to be Australia’s first commercial producer of PCAM, this integrated battery material facility is a perfect fit.”
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