Australia’s first battery-grade lithium refinery, the biggest outdoors China, has opened talks with electrical car makers because it seeks to satisfy surging demand from world automakers for the mineral.
Tianqi Lithium Vitality Australia, collectively owned by Chinese language group Tianqi and Australian firm IGO, mentioned it was aiming to provide quite a few world automakers with lithium hydroxide from its plant in Kwinana, close to Perth, Western Australia. Lithium hydroxide is the refined product utilized in electrical car batteries.
“I feel it’s a matter of time,” mentioned Raj Surendran, chief working officer of the three way partnership that owns the plant, about supplying lithium hydroxide on to electrical car corporations relatively than exporting the uncooked mineral to be refined in China.
He didn’t give additional particulars of the talks. However he mentioned that the Kwinana plant’s manufacturing might quadruple within the coming years.
World lithium provide is predicted to triple within the subsequent 9 years, based on funding financial institution Barrenjoey, however that also is not going to be sufficient to match the wants of the electrical car market.
Regardless that it’s majority owned by a Chinese language firm, TLEA is seen as vital to realising a push to entry provides of refined minerals outdoors China, which dominates the market. Automakers in Europe and Japan are anticipated to be vital clients of the refinery.
Carmakers, together with Ford, Tesla and their Japanese rivals, are already signing offers with different Western Australian miners together with BHP, Wesfarmers, Liontown and Lynas to safe uncooked supplies corresponding to nickel and lithium which might be essential for electrical autos.
Hayden Bairstow, head of sources analysis at Macquarie, mentioned demand for lithium hydroxide was driving partnerships to remodel Western Australia into the centre of the trade outdoors China.
“Persons are determined to pay money for it however loads of the data is in China, so joint ventures like Tianqi [and] IGO are taking place,” he mentioned. “That is the primary large buildout of hydroxide capability wherever else on the planet. It’s nonetheless in its infancy however inside a decade, will probably be a considerable and vital area for everybody’s provide chain.”
TLEA mentioned it has taken A$1bn (US$687mn) of funding to provide lithium that’s pure sufficient to be used in batteries. Erik Laurent, basic supervisor of the plant, described it as refining the equal of “a teaspoon of water from a yard swimming pool”.
Tianqi began constructing the refinery six years in the past when Sino-Australian tensions — which have grow to be elevated because the begin of the Covid-19 pandemic — had been a lot decrease.
The mission was beset by issues and delays. Tianqi, which is listed in Shenzhen and in addition floated in Hong Kong this 12 months, as soon as absolutely owned the refinery and the mine.
However the indebted Chinese language firm discovered itself getting ready to chapter two years in the past when the lithium value collapsed. It additionally grew to become embroiled in a bitter dispute with its building contractor.
IGO purchased into the refinery and Tianqi’s Australian hard-rock lithium mine in 2020 in a $1.4bn deal for a 49 per cent stake.
Peter Bradford, chief govt of IGO, advised the Diggers and Sellers convention in Kalgoorlie, Western Australia, this month that the refinery was essential to his firm’s push into the booming lithium market.
“I’m assured that now now we have the recipe proper, we will cease the give attention to high quality and transfer the main focus to amount,” he mentioned of the refinery’s output.
Gray-coloured spodumene, a lithium ore, is refined in Kwinana by heating it in rotary kilns at 1,100C and utilizing sulphuric acid to separate different elements — together with gypsum and sodium sulphate, which is used for detergent — from the core product. The white powder, the consistency of refined sugar, is then packed into 450kg luggage which, at present costs, are value A$28,000 every.
The refinery is fed by the Greenbushes mine 250km south of Kwinana, which exports spodumene to China. The mine, which is collectively owned by Tianqi, IGO and US firm Albemarle, is ready to nearly double its output to 2.2mn tonnes by 2027.
Albemarle is planning to construct a separate refinery alongside an area firm, Mineral Sources, that can even be equipped by Greenbushes.
Some fear concerning the political threat of the TLEA refinery, given China-Australia tensions. The Chinese language affect continues to be obvious in Kwinana. Guests are greeted by two large marble Chinese language lion statues on the door, whereas the lobby is festooned with a big frieze of pandas at play. The Chinese language ambassador to Australia visited the plant in June
However Surendran mentioned the enterprise operates independently of its majority proprietor and has its personal board. He mentioned Tianqi has not been “heavy-handed” in its method to the Australia-based enterprise.
Susan Zou, senior metals analyst with Rystad Vitality, mentioned the funding in jobs and excessive value-added lithium merchandise was useful to the Australian market.
“These components, in addition to the prevailing three way partnership and collaboration with native companions, assist to mitigate any political dangers,” she mentioned of the refinery.