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Australia's lithium refinery targets diversified carmakers from China
Australia's first battery-grade lithium refinery, the largest outside of China, has opened talks with electric vehicle makers as it seeks to meet growing demand from global carmakers for its products. with this mineral.
Tianqi Lithium Energy Australia, jointly owned by a Chinese corporation Tianqi and Australian company IGO, said they are aiming to supply several global carmakers with lithium hydroxide from their plant in Kwinana, near Perth, Western Australia. Lithium hydroxide is a refined product used in electric vehicle batteries.
Raj Surendran, chief executive officer of the joint venture that owns the plant, said: "I think it is a matter of time, in terms of supplying lithium hydroxide directly to electric vehicle companies instead of exporting the mineral. raw for refining in China.
He did not give further details about the negotiations. But he says the Kwinana plant's output could quadruple in the coming years.
According to investment bank Barrenjoey, the global supply of lithium is expected to triple over the next nine years, but that still won't be enough to meet demand. tram market.
Although it is largely owned by a Chinese company, TLEA is seen as important in promoting access to refined mineral supplies outside of China. dominate the market. Carmakers in Europe and Japan are expected to be important customers of the refinery.
Carmakers, including Ford, Tesla and their Japanese rivals, have contracted with other Western Australian miners including BHP, Wesfarmers, Liontown and Lynas to secure the ingredients raw materials such as nickel and lithium are important for electric vehicles.
Hayden Bairstow, head of resources research at Macquarie, says demand for lithium hydroxide is driving partnerships that make Western Australia a hub for the industry outside of China.
"People are desperate to grasp it but a lot of the knowledge lies in China, so ventures like Tianqi [and] IGO is happening," he said. "This is the first time to build a large hydroxide capacity anywhere else on the planet. It's still in its infancy but within a decade it will be a significant and critical area for everyone's supply chain."
TLEA says it has invested AU$1 billion (US$687 million) to produce lithium pure enough for use in the battery. Erik Laurent, the plant's general manager, describes it as having the same filtration capacity as "a teaspoon of water from a backyard swimming pool".
Tianqi started building the refinery six years ago when Sino-Australian tensions – which have been heightened since the start of the Covid-19 pandemic – were much lower.
The project has been beset by problems and delays. Tianqi, listed in Shenzhen and also floating in Hong Kong this year, each fully owned the oil refinery and mine.
However, the indebted Chinese company was on the verge of bankruptcy two years ago when the price of lithium dropped. It is also embroiled in a bitter dispute with its building contractor.
I GO buy into an oil refinery and Tianqi's hard rock lithium mine in Australia in 2020 in a deal worth $1.4 billion with a 49% stake.
Peter Bradford, chief executive of IGO, told the Diggers and Dealers conference in Kalgoorlie, Western Australia, this month that the refinery played a key role in pushing his company into the booming lithium market. explode.
"I am confident that now that we have the right formula, we can stop focusing on quality and shift our focus to quantity," he said of refinery output.
Gray spodumene, a lithium ore, is refined in Kwinana by heating in a rotary kiln at 1,100C and using sulfuric acid to separate other components – including gypsum and sodium sulphate, used for cleaning – from the core product. The white, thick powder of refined sugar is then packed into 450kg bags, at current prices, worth AU$28,000 each.
The refinery is supplied by the Greenbushes field 250 kilometers south of Kwinana, which exports spodumene to China. The mine, jointly owned by Tianqi, IGO and US company Albemarle, is expected to nearly double production to 2.2 million tonnes by 2027.
Albemarle is planning to build a separate refinery with a local company, Mineral Resources, which will also be supplied by Greenbushes.
Some worry about the political risks of the TLEA refinery, amid China-Australia tensions. Chinese influence is still evident in Kwinana. Visitors are greeted by two giant marble Chinese lion statues at the door, while the foyer is decorated with a large bas-relief of a panda at play. The Chinese Ambassador to Australia visited the factory in June
But Surendran said the business operates independently of the majority owner and has its own board of directors. He said Tianqi had not been "heavy-handed" in its approach to the Australia-based business.
Susan Zou, senior metals analyst at Rystad Energy, said investing in jobs and high value-added lithium products is beneficial for the Australian market.
"These factors, as well as existing joint ventures and partnerships with local partners, help mitigate any political risks," she said of the refinery.
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