Although corporate interest in the lithium Industry has seen exponential growth over the last few years, experts say at least another US$12 billion needs to be invested in order to ramp up supply to meet the growing demand.

Speaking at the Down Under mining conference in Perth, Western Australia – US lithium expert Joe Lowry told investors and companies alike that the Big Four’ global lithium producers – SQM, Albemarle, Jiangxi Ganfeng Lithium and Tianqi – would not be able to meet the global supply for lithium by 2025 without further significant investment.

“Overall, the industry faces a lack of financing and needs to inject more than US$12 billion within five years to have a chance of meeting demand,” Mr Lowry said.

“This requirement is exacerbated further by known and emerging failures in lithium start-ups which have demonstrated a lack of necessary skill-sets – high profile failures that have discouraged sector investment.

“There will not be any significant lithium chemical oversupply anytime soon. While there have been many optimistic supply forecasts, recent results speak for themselves.”

The demand for battery related lithium accounts for about 60% of the entire market, up from 25% in previous years.

With no other feasible alternative to feed our global reliance on smart devices, the only way forward is to increase investment in producing more of the battery grade mineral.

Mr Lowry said “this market is becoming a battery-related market. There’s really no question about that,”. Although according to Lowry, new lithium mines are difficult to bring online he believes the big 4 will likely only be able to maintain their current 68% market share.

“Almost every lithium project that has ever started with optimism has taken three or four years longer to reach full capacity and that’s what we’re seeing,”

“That means there’s a lot of juniors or smaller companies around the world that need to get financed and need to get moving.”

Ten years ago, it would have been unforeseeable to truly understand how reliable we would become on lithium powered smart devices and electric vehicles. Back then, Western Australia only had one lithium mine in operation and the mineral sparked little interest as compared to the fossil fuel industries such as oil and LNG. 

In fact, up until recently our exports of hard rock spodumene (lithium ore) was negligible as compared to the South American lithium brine produces in Chile and Argentina.

Fast forward a decade and we have seen unprecedented fall in oil and significant interest in renewable energy – including the lithium battery storage behind it all.

As of 2019, Western Australia has received about $4 billion worth of investment into lithium production and we are now contributing to over 50% of the world’s total lithium supply. Not a bad effort considering most of the highest-grade hard rock spodumene (a preference over the brine form due to superior refining properties) comes from the small regional town of Greenbushes in Western Australia.

Whilst WA is now doing most of the heavy lifting with regards to mining the desired mineral, most downstream value-adding activities such as refining, and battery manufacturing still occurs in China and other Asian nations. This is set to change, however, with several Lithium Hydroxide Refineries currently under construction in Western Australia, securing more of the value chain within the state over the next five years.

The Association of Mining and Exploration Companies is forecasting that the global lithium value chain will be worth over $2 trillion in the next 6 years. There have been a number of Lithium Hydroxide projects given the green light, including Tianqi and Covalent both building Lithium Hydroxide plants in Kwinana, as well as American owned Albermarle investing in a refinery in Kemerton.

In addition to this foreign investment, the Government has contributed $25 million to fund the Future Batteries Industries Cooperative Research Centre In Perth (FBICRC).

With all this interest into our valuable resources, Western Australia has the potential to become a significant player in the next generation of energy storage. 

Talison Lithium has awarded Mondium a $100 million contract for the design and construction of a new tailing retreatment processing plant at the Greenbushes mine in Western Australia.

Mondium, a joint venture between Monadelphous (60 per cent) and Lycopodium (40 per cent), will carry out all engineering and design, procurement (EPC) and site construction of the plant, subject to regulatory approvals.

The contract also includes design and construction of detailed earthworks, concrete works, structural, platework, electrical and instrumentation works and controls.

It is Mondium’s largest contract since being formed in 2016 and its second with Talison Lithium, following the development of a new chemical-grade plant feed system at Greenbushes last year.

The contract furthers Talison’s expansion of Greenbushes and the award of the latest agreement for activities at the site. Its previous contract awards have included a $23.5 million deal with Kerman Contracting in August last year.

That contract involved the construction of a new bulk storage facility at Port Bunbury in Western Australia that supported its existing Greenbushes expansion.

Talison has also previously awarded Kerman a contract to construct a new crushing and screen circuit agreement with MSP Engineering at the site, which was expected to deliver an extra 520,000 tonnes per year of lithium concentrate.

Mondium director Bob Osmetti said the contract highlighted the company’s ability to deliver quality projects. Work under the contract is expected to be completed by June 2020.

“We are excited to have been awarded such a significant contract and look forward to continuing our strong relationship with Talison Lithium,” he said.

The Greenbushes operation is approximately 250 kilometres south of Perth and 90 kilometres south-east of the Port of Bunbury.

American Lithium major Albermarle and WA Premier Mark McGowan have announced on Thursday that construction has now started at the $1 billion plant in Kemerton Western Australia. The Albermarle plant is currently the largest lithium processing plant that has been approved in Australia and is set to deliver up to 100 000 tonnes of battery grade lithium hydroxide each year.

Albermarle joins other foreign companies such as Chinese owned Tianqi and South American SQM in the race to secure a piece of the world’s largest hard rock spodumene reserves in Greenbushes, Western Australia.

Hard rock spodumene is the preferred ore for lithium-ion battery producers as it is cheaper to produce and often provides a much better grade. Australia’s South West region is rich in hard rock spodumene, which has resulted in significant foreign investment in recent years.

Albemarle has a 49 percent stake in Talison Lithium, which operates the Greenbushes mine.

The project is expected to create over 1000 with production planned to start in late 2020.

Albemarle Lithium Sites

The growing demand for lithium

Premier Mark McGowan and Minister Bill Johnston have launched the Western Australian Future Battery Industry Strategy to grow the State into a world-leading exporter of future battery minerals, materials, technologies and expertise.

The State Government’s Future Battery Industry Strategy for Western Australia

The rapid uptake of electric vehicles and battery-based energy storage systems around the world is driving global demand for lithium-ion batteries. Electric vehicle and battery manufacturers are securing sources of minerals, materials and components to meet this increase in demand representing a significant opportunity for the State.

Western Australia is well placed to seize this opportunity. It has the minerals, the expertise, the standards, the infrastructure and the research capability to become a key player of the global battery value chain. However, it is unlikely that Western Australia will move into further processing, the manufacturing of battery components and the assembly of energy storage systems without leadership from the State Government.

Three of the world’s four largest producers of lithium are looking to develop downstream processing projects in Western Australia. The three companies plan to invest more than $2 billion in the development of these projects, creating more than 1,000 jobs during the construction phase and 800 during the operation phase.

The Western Australian Government has established 12 strategic industrial areas to host downstream processing and other heavy or strategic industrial activities. These areas are located close to key infrastructure and resources and are ready to connect to essential services, such as water and electricity. Environmental and planning frameworks are in place to guide approvals for industrial activities in these areas.

For a copy of the strategy, visit https://www.jtsi.wa.gov.au/fbis