Following a assessment prompted by weak lithium costs, Albemarle suspended development of the A$900 million Practice 3 and can idle Practice 2, shifting its focus to the ramp-up of Practice 1.
Different market gamers have had their quota of challenges. Tianqi Lithium and IGO Ltd. (ASX: IGO) have struggled to ramp up their Kwinana hydroxide plant, in an industrial space outdoors Perth, because it was restarted in late 2021.
IGO CEO Ivan Vella instructed reporters on the sidelines of the Diggers & Sellers Mining Discussion board in Kalgoorlie this week that though Kwinana’s efficiency has improved, it stays a troublesome operation.
“If we glance into the trade, and clearly Albemarle’s choice, it exhibits you simply how challenged it’s,” Vella mentioned. “The margins are very low, and there’s loads of stress on the trade.”
Canaccord Genuity analyst Tim Hoff instructed MINING.COM different downstream sectors, together with nickel and alumina, had felt the identical stress.
“I feel that’s going to stay actually troublesome in Australia. We merely don’t have the best value buildings,” he mentioned. “We merely don’t have the best trade buildings to actually succeed and place our gamers nicely.”
Significance of fine companions
Liontown Sources (ASX: LTR), which produced in July its first spodumene from its Kathleen Valley mine in Western Australia, is collaborating with LG Power Answer and Sumitomo on constructing a downstream facility.
“We’re nonetheless sturdy with that component of our technique,” Liontown managing director Tony Ottaviano mentioned. “We nonetheless consider it’s the value-maximizing pathway.”
Ottaviano mentioned the end result was depending on partnerships, location of the plant and the product it produced, pointing to Albemarle’s issues round WA product not being compliant with the US Inflation Discount Act.
“We received’t have that problem,” he mentioned.
Vella mentioned he wasn’t nervous concerning the prospect of IGO being blocked from receiving subsidies due from its Chinese language accomplice.
“What we’re making an attempt to do is construct Australian belongings for Australia, Australian jobs, Australian provide chain, Australian trade that has power and longevity,” he mentioned.
“The place that capital comes from shouldn’t actually be an enormous determinant of how the federal government would possibly contribute in the direction of it – that will probably be one thing they’ll work by means of.
“However essentially, we have now to make the selections based mostly on a superb enterprise case and it must be aggressive by itself proper, so in the event you actually reside and die on some subsidy, I feel that’s a really harmful place to be.”
Sector’s want record
Whereas not in lithium, Lynas Uncommon Earths (ASX: LYC) has lately commissioned a cracking and leaching plant in Kalgoorlie.
CEO Amanda Lacaze recognized two key areas governments may deal with to help with Australia’s competitiveness and guarantee it grew to become a “important minerals superpower”.
“Uninterruptible energy and loads of it at low prices at low costs in Kalgoorlie is absolutely the high of my record,” Lacaze instructed reporters at a information convention.
“Quantity two on my record is as soon as once more associated to right here in Kalgoorlie, which is a few actually considerably improved logistics.”
Vella mentioned the three must-haves have been low-cost and dependable inexperienced energy, good shared infrastructure and productive workforces.
“And the federal government must be placing actual cash on the desk to assist construct out that set of power sources and the entire related infrastructure,” he mentioned.
Cannacord’s Hoff mentioned subsidies or handouts weren’t the reply, however there have been 4 issues he wished the federal government to handle: infrastructure, energy, mining training and tax reform.
“We want a brand new port right here in WA. We want energy to be safe. We don’t want the most affordable energy on the earth, however we want dependable energy the place folks can construct 20-year tasks and know that they’re going to have constant energy pricing,” he mentioned.
“We do want some tax reform, and I feel there may be some room to manoeuvre there, and that’s actually the monetary incentives we need to see that establishes a powerful trade – not only a bubble.”
Innovate to outlive
Pilbara Minerals managing director Dale Henderson described Albemarle’s choice as a setback.
“The trade’s bought much more maturing and evolution to return,” he mentioned.
Whereas Pilbara has a stake in a hydroxide plant in South Korea, it’s nonetheless engaged on what it calls a “mid-stream” product, or a lithium salt.
“That’s all about chemical processing on the mine website and bringing onshore worth however stopping quick or among the complexity which comes with the total chemical course of,” Henderson mentioned.
“There’s extra innovation, I feel, to return and I feel Australia ought to hold working arduous on doing what it could actually to deliver worth onshore.”