Kwinana Lithium & Green­bushes Mine

WA spo­dumene pro­duc­ers are mov­ing down­stream to cash-in on sky-high lithium hy­drox­ide prices. But is the cap­i­tal spend on pro­cess­ing in­fra­struc­ture worth the risk?

The Australian Mining Review - - CONTENTS - EL­IZ­A­BETH FABRI

2017 was a game-changer for the WA lithium in­dus­try.

In 2016 there was just a few pro­duc­ing mines in the State; in 2018 this num­ber looks set to ex­plode as in­vestors pour cap­i­tal into the swarm of lithium mines now at var­i­ous stages of de­vel­op­ment.

The Neomet­als and Min­eral Re­sources Mt Mar­ion JV en­tered pro­duc­tion in late 2016, fol­lowed shortly by Galaxy Re­sources’ Mt Cat­tlin project which ex­ported its first ship­ment of lithium con­cen­trate in Jan­uary 2017.

Next cabs off the rank are Pil­bara Min­er­als’ and Al­tura Min­ing’s iden­ti­cally named Pil­gan­goora projects, and Tawana Re­sources’ Bald Hill project, which are in the fi­nal stages of con­struc­tion and due to come on­line in 2018.

Then there’s Kid­man Re­sources’ Earl Grey project, which could hit the start but­ton on pro­duc­tion as early as 2019.

Fur­ther south, an ex­pan­sion at Tal­i­son’s long-es­tab­lished Green­bushes mine was also mak­ing head­way.

How­ever, pro­duc­ers are also look­ing be­yond lithium con­cen­trate sup­ply to­wards ready-for-mar­ket, bat­tery-grade lithium to fuel the im­pend­ing elec­tric ve­hi­cle boom.

“I think glob­ally, the sig­nif­i­cant short­age in the next five years is go­ing to be in down­stream pro­cess­ing and not in re­sources,” Tianqi Lithium Aus­tralia gen­eral man­ager Phil Thick said.

“There’s more than ad­e­quate re­sources around the world to sup­ply the ex­po­nen­tial growth in de­mand ex­pected in the next eight or nine years, but there’s not a lot of in­vest­ment in plants like we’re build­ing, and that’s where the big gap will be.”

Mr Thick is talk­ing about Tianqi Aus­tralia’s Kwinana Lithium Plant – cur­rently un­der con­struc­tion – which will be­come Aus­tralia’s first lithium hy­drox­ide pro­cess­ing fa­cil­ity.

The Kwinana Lithium Plant’s $400 mil­lion first stage will pro­duce lithium hy­drox­ide from spo­dumene mined at the Green­bushes op­er­a­tion, with com­mis­sion­ing set for late 2018.

The $300 mil­lion sec­ond stage re­ceived board ap­proval in Oc­to­ber and will dou­ble plant ca­pac­ity to 48,000 tonnes of lithium hy­drox­ide per an­num.

A num­ber of WA min­ers were fol­low­ing in Tianqi’s foot­steps with plans to build plants to process lithium con­cen­trate, worth about $1000 a tonne, into bat­tery-grade lithium hy­drox­ide, which fetches 10 times that amount.

Kid­man Re­sources re­cently teamed up with Chilean lithium ma­jor SQM to build a chem­i­cal plant at its planned Earl Gray mine, that will gen­er­ate up to 200 jobs dur­ing con­struc­tion and 180 full-time op­er­a­tional jobs.

Mt Mar­ion’s joint ven­ture part­ners were also look­ing to de­velop a lithium hy­drox­ide plant at their mine, while Pil­bara Min­er­als and Al­tura Min­ing were con­sid­er­ing build­ing plants in Asia.

In Novem­ber, Albe­marle (which had a stake in Green­bushes) also sought Gov­ern­ment per­mis­sion to build a new one-train down­stream pro­cess­ing plant near Bun­bury ca­pa­ble of pro­duc­ing 20,000tpa.

Mr Thick said he was aware Albe­marle was also set­ting its sights on a staged ex­pan­sion of the fa­cil­ity with an ad­di­tional four trains and out­put of 100,000tpa.

“They said they were ex­pect­ing the first plant to be pro­duc­ing in 2020,” he said.

“They’re try­ing to take ad­van­tage of the same thing we’re tak­ing ad­van­tage of, which is this short­fall that we’re ex­pect­ing in pro­cess­ing quan­ti­ties.”

Down­stream pro­cess­ing: the risks

How­ever, in­vest­ing in lithium pro­cess­ing fa­cil­i­ties was not all smooth sail­ing. “There’s sig­nif­i­cant risk,” Mr Thick said. “We’ve been run­ning two plants in China for 20 years so we know the process and the chem­istry prob­a­bly bet­ter than any­one in the world – and it’s still a chal­lenge.

“For com­pa­nies that haven’t done this be­fore and are talk­ing about go­ing into this space, there is risk as­so­ci­ated with it. It’s not a guar­an­teed re­sult or an easy process.”

Mr Thick said it all came down to the qual­ity of the prod­uct, and elec­tric ve­hi­cles be­ing the largest driver of global lithium de­mand needed the high­est qual­ity avail­able.

“You have got to get your chem­istry right, you have got to get pro­cess­ing spot on and there’s a lot of vari­ables in that; right from the qual­ity of the ore you’re start­ing with, to how well you know the process and how ex­pe­ri­enced you are with it,” he said.

“We have been do­ing it for a long time and we’re still im­prov­ing and find­ing op­por­tu­ni­ties to get bet­ter at it.

“That gives us a strong ad­van­tage over oth­ers that are just en­ter­ing for the first time.”

There’s also the risk a re­place­ment for lithium ion bat­ter­ies could take over — for ex­am­ple sodium ion, alu­minium graphite and gold nanowire cur­rently in the re­search phase — but Mr Thick said this was not a con­cern.

“We recog­nise there is a lot of work be­ing done around the world on re­search around what is go­ing to be the next big thing that re­places lithium ion bat­ter­ies,” he said.

“We prob­a­bly ex­pect at some point they’re go­ing to find that but it’s taken about 20 years for lithium ion bat­ter­ies to be the go to tech­nol­ogy for just about all stor­age re­quire­ments and that’s be­com­ing pretty deeply em­bed­ded in fa­cil­i­ties and in­dus­tries around the world, par­tic­u­larly the elec­tric ve­hi­cle in­dus­try.

“We think even if some­thing comes up in the next cou­ple of years as a re­place­ment for lithium it would be 10-15 years be­fore that’s fully com­mer­cialised and an ef­fec­tive re­place­ment.

“We’ve got no con­cern in the short term about lithium ion bat­ter­ies re­main­ing the ab­so­lute driv­ing force for elec­tric ve­hi­cles and for gen­eral power stor­age.

“That’s why we’re in­vest­ing so much money in it.”

Yet, Mr Thick said he was dis­ap­pointed that Aus­tralia was “so slow” in em­brac­ing the roll­out of elec­tric ve­hi­cles.

“We use dis­tance and range of ve­hi­cles as an ex­cuse for not be­ing more ag­gres­sive in this space be­cause Aus­tralia is so large,” he said.

“But elec­tric ve­hi­cles in their stan­dard form only have a 200-250km range and about 90 per cent of Aus­tralians that live around city ar­eas are very rarely go­ing into the coun­try, so there’s no ex­cuse for us be­ing as slow as what we are.

“I sus­pect when the large car man­u­fac­tur­ers that we de­pend upon are pro­duc­ing much larger quan­ti­ties of elec­tric ve­hi­cles we’ll have to get on board with that.”

Build­ing a WA lithium hub

All go­ing well, WA is set to be­come the lithium cap­i­tal of the world.

While much of the new lithium min­ing ac­tiv­ity will be hap­pen­ing up in the Pil­bara, Kwinana had its name up in lights as a po­ten­tial lithium pro­cess­ing hub for the State.

Min­ers such as Kid­man and Neomet­als were con­sid­er­ing op­tions to build their prospec­tive pro­cess­ing plants in the town, 38km south of Perth’s CBD.

“Kwinana is a re­ally great place to build this type of plant be­cause you have got all of the in­puts into the plant that you need, like caus­tic soda and sul­phuric acid [which are] all avail­able on the strip there,” Mr Thick said.

“You’ve got elec­tric­ity, gas, wa­ter all in the qual­ity and quan­tity that you need, and then you’re close to Fre­man­tle Port for ex­port.

“Prob­a­bly the most im­por­tant thing is a ready sup­ply of world-trained ex­pe­ri­enced peo­ple to man the plant, be­cause there’s been a lot of sim­i­lar ac­tiv­ity in Kwinana for years, and there are peo­ple who are keen to get into this new in­dus­try.”

Mr Thick said the com­pany was “ex­tremely ex­cited” it was lead­ing the charge and hope­ful com­pa­nies such as Albe­marle would fol­low through with their plans to de­velop down­stream fa­cil­i­ties to get a rea­son­able per­cent­age of bat­tery-grade prod­uct out of the State.

“We’re fully sup­port­ive of other play­ers fol­low­ing us down­stream, and if we can set up WA as a sig­nif­i­cant hub that would be great,” he said.

“We al­ready sup­ply more than a third of the world’s lithium in con­cen­trate form, but if we could get the per­cent­age of pro­cessed ma­te­rial out of this State up to sim­i­lar lev­els that would be fan­tas­tic.”

“We’ve got no con­cern in the short term about lithium ion bat­ter­ies re­main­ing the ab­so­lute driv­ing force for elec­tric ve­hi­cles and for gen­eral power stor­age.”

Im­age: Tianqi Lithium Aus­tralia.

Im­age: Kid­man Re­sources.

WA is set to be­come the lithium cap­i­tal of the world.

Stage 1 of the Kwinana Lithium Plant will be com­plete late 2018.

Im­age: Tianqi Lithium Aus­tralia.

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