Kidman and SQM plan Kwinana lithium refinery

This story was originally published in The West Australian on 5 May 2018 with the headline "Kidman’s power play with plant in Kwinana." © Peter Milne.

The State’s charge into the battery minerals industry is gathering pace, with Kidman Resources and Chilean lithium giant SQM looking to build Kwinana’s second lithium refinery.

The joint venture, tagged WA Lithium, yesterday secured an option on a site to process ore from Kidman’s Mt Holland project near Southern Cross.

Premier Mark McGowan, speaking at Kwinana yesterday, said WA was in the box seat to take advantage of the surge in demand for batteries to power electric vehicles and support renewable energy.

“We want more lithium mines here, we want it processed here, we want to be part of the solution to climate change,” he said.

WA Lithium is expected to release a feasibility study for the refinery this year and for the plant to start operations in 2021.

Mr McGowan said he expected an investment decision late this year or early next year.

Construction of the refinery is expected to create 400 jobs, with a further 300 workers building the Mt Holland mine and concentrator. In operation the refinery and mine would require about 150 workers each.

Kidman Resources chief financial officer Charles McGill said the plant would be able to switch between producing lithium hydroxide, at a rate of 44,000 tonnes a year, or 37,000 tonnes a year of lithium carbonate.

Mr McGill said lithium hydroxide was in favour with the market, and demanded by high end battery manufacturers such as Tesla, but the joint venture wanted flexibility in case the market changed.

He said it was cheaper to extract lithium hydroxide from hard rock, which primarily occurred in WA, than the brine that is worked in Chile.

A cost estimate for WA Lithium’s plant was not released but Tianqi’s similarly-sized 48,000 tonnes a year lithium hydroxide plant, under construction in Kwinana, will cost about $860 million. US firm Albemarle is looking to build a third lithium plant in Kemerton.

The global lithium value chain is expected to grow from $165 billion to $2 trillion by 2025, according to a recent Association of Mining and Exploration Companies study.

In a further push for the State’s battery minerals industry, Mines and Petroleum Minster Bill Johnston pledged $5.5 million to a mooted New Energy Industry Co-operative Research Centre if the Federal Government decided to base it in Perth.

“WA is the only place that makes sense for a CRC in this area, we have every element that you need for a battery,” he said.

Last year Kidman handed over 50 per cent of the project to SQM for an initial $US30 million, staged payments of $US80 million and a convertible loan of $US21.5 million. Kidman has an option to take a 50 per cent stake in the refinery. Kidman shares closed steady at $2.05 a share.