Australia's aggressive development of its lithium processing business aims to challenge China

Kidman Resources and the Chilean chemical conglomerate SQM have pledged to build a lithium treatment facility in Kwinana, the latest in a series of Western Australian initiatives to challenge China's dominance in the field.

The companies have been assessing the establishment of the facility, which has an initial capacity of 44,000 tons of lithium hydroxide or 37,000 tons of lithium carbonate per year at the plants in Kwinana, Bunbury and Kalgoorlie.

Some 400 jobs are expected to be created during the refinery construction phase, which is expected to start in mid-2019.

The facility will be built with a 50:50 joint venture company, West Australia Lithium, and will convert lithium ore from the Kidman and SQM joint venture in MtHolland near the Southern Cross.

Jidemandongshi, general manager, said the choice of Kwinana was a big step forward in the company's ambition to become an important lithium processor.

"The advantages of Kwinana far outweigh those of other sites we have considered," Mr. Donohue said in a statement to ASX.

It is important that this statement follows our recent comments about our high interest in seeking sophisticated lithium consumption from all sides. "

Market analysts have pointed out in recent months that, while there are many businesses committed to new lithium supplies, including Australia's Pilbara Minerals, Altura Mining, Galaxy Resources, MineralResources, CoreExploration, Orocobre and Tawana Resources, there is also greater demand for processing equipment.

Roskill's analysis shows that China is the leading country for the conversion of lithium ore. Lithium ore is industrially known as lithium pyroxene, as well as lithium salts, hydroxides or carbonates.

About 41 inches of lithium carbonate in the world is processed in China, mainly by the market leader Tianqi lithium industry and the Lithium industry.

SQM currently accounts for 24 per cent of global production.

However, Luosijier said that by 2025, about 785,000 tons of lithium carbonate equivalent will be required each year. This is mainly due to the growth of electric vehicles and power storage applications, but it is expected that only about 750,000 tons of lithium carbonate will be produced each year at that time.

Tian Qi has addressed this shortcoming, not only by establishing a $700 million processing facility in Kwinana, but also close to the Kidman-SQM proposal, and by building two additional plants in China.

Neometals, a Washington-based lithium miner, is assessing the prospect of building a lithium hydroxide plant near Karguri, and earlier this week announced to ASX the appointment of Germany's M+W Group to carry out engineering research for the plant.

Neometals and Ganfeng have signed a Phase I Production Agreement for the MtMarion Mine, and a final decision is expected early next year.

The company is seeking to build processing facilities to gain a cost advantage over its competitors, especially in transportation, transportation and taxes.

Alberta, an American chemical producer, also plans facilities in Washington after promising to spend $560 million to develop a lithium conversion plant near Banbury.

The multiplex mining group Mining Resources is also exploring the possibility of building the WA lithium power plant under the Wodgina operation in Pilbara, which launched a minority sale earlier this month.

Another ASX-listed lithium producer, Argentino-focused Orocobre, is expected to decide in the middle of the year whether to add $300M to its Olaroz-operated processing facilities.

If Orocobre decides to proceed, it is expected that the plant will be operational in the second half of 2019.

Orocobre is also pushing ahead with plans for a joint venture with Toyota Tshuho to build a lithium hydroxide plant.

The Western Australian Government also announced that it would continue to support the establishment of the State as an investment destination for downstream processing, committing $5.5 million in the forthcoming national budget to support the development of technical metals and renewable energy.

"The amount of lithium, nickel, cobalt and other metals needed for our new technology, together with our technical skills and our proximity to Asia, means that Western Australia is taking full advantage of the growing battery market," said Bill Johnston, the Minister of Mines and Oil.

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