Australia is hedging its bets on domestic lithium refining, with
several new lithium hydroxide converter plants
commissioned or under construction. Lithium is
expected to become one of Australia’s most valuable
export products, after iron ore, coal, and LNG.
AME forecasts the Australian lithium production to total
464kt LCE over 2022, up 62% from 2021. Australia
remains the largest lithium mining country, accounting
for roughly half of global mined lithium supply.
Australia’s lithium reserves are the second largest in the
world, after only Chile.
The lithium supply is expected to grow an additional
58% in 2023, reaching 734kt LCE. Miners are expanding
production to maximise output as they capitalise on
soaring lithium prices. Multiple new projects are due to
begin production in 2023 and 2024.
Australian
exports of lithium concentrate totalled A$2.63bn
(US$1.77bn) for the June quarter, up 737% from a year
ago.
Mine Expansions
Lithium majors, including Albemarle and Pilbara
Minerals, are expanding their operations in Australia.
Pilbara Minerals has made a Final Investment Decision
in June to increase the nameplate production capacity of
its Pilgan Plant at the Pilgangoora Operation. An
integrated crushing and ore sorting facility will be
constructed at the site located in Western Australia. The
A$194.5m (US$130m) investment will enable the facility
to process up to 5Mtpa of ore throughput. Pilbara is also
constructing a A$103m (US$69m) primary rejection
heavy media separation circuit to boost spodumene
concentrate production capacity by 15ktpa LCE.
Pilbara Minerals produced 19kt LCE of spodumene
concentrate in the June quarter, up 58% from the 12kt
LCE production in the March quarter. Pilbara’s total
spodumene concentrate production capacity will reach
100ktpa LCE once the expansions are complete by late
2023. Pilbara reported an average sales price for the
June quarter of US$4,267/t, up 61% from the average
price of US$2,650 achieved in the March quarter.
Talison Lithium, which is owned by Albemarle (49%) and
joint venture partners Tianqi Lithium and IGO (51%), is
increasing capacity at its Greenbushes site in Western
Australia. Greenbushes, which currently produces 188ktpa LCE of lithium concentrate, accounted for
nearly 40% of global hard rock lithium output in 2021.
Greenbushes will increase its production by 42kt LCE
through its Tailings Retreatment Project (TRP). TRP is
currently in a ramp-up phase as of the September
quarter, with full production expected by the end of the
year.
Talison Lithium approved construction of an additional
expansion project, CGP3, with commissioning expected
by 2025. CGP3 will increase lithium concentrate
capacity by 77ktpa LCE. After the completion and rampup of the TRP and CGP3 expansions, Greenbushes will
have a production capacity close to 300ktpa LCE.

Mt Marion, a joint venture project between Mineral
Resources and China’s Jiangxi Ganfeng Lithium, is also
increasing its production capacity. The JV partners are
investing AU$120m (US$75m) to expand Mt Marion’s
capacity to 89ktpa LCE. The expansion will be done in
two stages, with Stage 2 expected to be complete by
December 2022.
New Mining Projects
A number of new lithium mining projects are in the
pipeline for Australia, with the expected new operations
from junior lithium minors adding upwards of 100ktpa
LCE once their production is ramped up by 2024. Core Lithium officially opened its Finniss lithium mine in
October, with production still on track by the end of
2022. Located in the Northern Territory, Finniss is
Australia’s only lithium mine outside of Western
Australia. The Finniss project will have a spodumene
concentrate production of 25ktpa LCE. In August, Core
and Tesla extended their binding offtake term sheet,
previously announced in March. Core will supply Tesla
with up to 18kt LCE of spodumene concentrate over a 4-
year period. In addition to the offtake commitment, Tesla
will provide support to Core for the assessment and
possible development of Stage 3 Expansion.
Core Lithium officially opened its Finniss lithium mine in
October, with production still on track by the end of
2022. Located in the Northern Territory, Finniss is
Australia’s only lithium mine outside of Western
Australia. The Finniss project will have a spodumene
concentrate production of 25ktpa LCE. In August, Core
and Tesla extended their binding offtake term sheet,
previously announced in March. Core will supply Tesla
with up to 18kt LCE of spodumene concentrate over a 4-
year period. In addition to the offtake commitment, Tesla
will provide support to Core for the assessment and
possible development of Stage 3 Expansion.
Liontown Resources is expected to start construction of
its Kathleen Valley project in 2022 pending a final
investment decision. Since the start of this year,
Liontown has signed offtake term sheets with LG Energy
Solution, Tesla, and Ford. Under the agreement,
Liontown will supply 25ktpa LCE of spodumene
concentrate to Tesla and Ford as from 2024. Liontown’s
total offtake commitments now stand at up to 74ktpa
LCE of spodumene concentrate, representing 90% of
Kathleen Valley’s start-up production capacity. The
company plans to eventually expand output to 115ktpa
LCE. The project is expected to return free cash flow of
A$12.2bn (US$8.8bn) over the life of the mine.
Liontown plans to launch the mine with 60% renewable
energy, including a 13MW plus solar array, wind farm
and battery system. The company plans to be at net
zero carbon emitter by 2034. Ford will provide a
A$300m (US$207m) debt facility to Liontown, with the
proceeds to be used towards partially funding the
development costs of Kathleen Valley. This funding,
together with the proceeds from Liontown’s A$463m
(US$319m) capital raise in December 2021, paves the
way for a FID for the project by the end of 2022.
Liontown revealed the mine’s estimated cost had been
revised up from A$473m (US$326m) to A$545m
(US$375m).
Lithium Refineries
We expect Australia to process up to 20% of the world’s
lithium refining over the next five years as EV battery
demand continues to surge. China currently controls
over 80% of lithium hydroxide refining capacity. If
construction and commissioning of lithium converter
plants are completed without major delays, Australia will
reach 10% of the world’s refining capacity by 2024, and
20% by 2027.
MARBL, a joint venture between Albemarle and Mineral
Resources, operates the Kemerton conversion plant in
Western Australia. Kemerton 1 started its first lithium
hydroxide production in July. Kemerton 2 is still under
construction, with completion expected by the end of
2022 and first production in early 2023. The conversion
facility, with a capacity of 44ktpa LCE of lithium
hydroxide, processes spodumene ore concentrate from
the Greenbushes project.
Tianqi Lithium Energy Australia, a joint venture between
Tianqi Lithium and IGO, operates the Kwinana
conversion plant in Western Australia. The facility
started lithium hydroxide production in May and will have
a nameplate capacity of 48ktpa LCE by 2024. The
Kwinana plant receives its spodumene directly from the
Greenbushes mine 250km away.
Liontown is assessing an integrated refinery at its
Kathleen Valley site, with a PFS currently underway.
The refinery is expected to come online six years after
spodumene production at Kathleen Valley begins. At full
capacity, the refinery is estimated to produce 75ktpa
LCE of lithium hydroxide monohydrate. The refinery will
be one of the largest lithium refineries outside China
when fully commissioned.
Covalent Lithium, a joint venture between SQM and
Wesfarmers, is developing the fully integrated Mount
Holland project. Mount Holland is scheduled to be
operational in 2024. The refinery is expected to have an
85% lithium recovery rate from spodumene concentrate
and a lithium hydroxide production capacity of 40ktpa
LCE.
