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Australian refinery close to producing country’s first lithium hydroxide for batteries

A Sino-Australian joint venture has said it is close to Australia’s first battery-ready lithium hydroxide, as countries are working to loosen China’s suffocation grip on the lithium supply chain.

The Kwinana refinery near Perth in Western Australia, a joint venture between Tianchi and Australian miner IGO, will turn a refined spudoman from a Greenbushs mine near lithium hydroxide into batteries used in electric vehicles and power grids.

Australia is the largest lithium exporter in the world with 46.4 percent of the market in 2020, according to BP, but it has never distilled the product on land. The Kwinana refinery will be the first of its kind in Australia.

It will also be the first time that Tianqi, based in Sichuan Province and listed on the Shenzhen Stock Exchange, produces lithium hydroxide outside China.

Western governments have expressed growing concern over China’s control of the lithium supply chain, with batteries set to play a key role in transportation and power generation. As security of supplies becomes more important in the wake of Russia’s invasion of Ukraine, the West is expected to invest in more projects like Quinana, analysts said.

IGO, which bought 49% of the refinery’s shares last year, said the joint venture will produce lithium hydroxide at battery level by March. But the IGO said this target was missed for technical reasons, reflecting the complexity of the scale of lithium hydroxide refining.

He said the plant already produces a small amount of sub-battery lithium hydroxide, but has not yet been able to refine the process to produce a refined product suitable for use in lithium-ion batteries. He added that the joint venture hopes to start producing lithium hydroxide at a “soon” battery level.

China is arguably the world’s largest refinery of lithium, controlling about 80 percent of the market, according to a 2020 study by BloombergNEF.

The Kwinana refinery is planned to produce up to 24,000 tons of lithium hydroxide per year, a target it hopes to reach within a year of initial production. It has attraction agreements with three South Korean companies and one Swedish group.

It is expected to be the first of three planned lithium hydroxide refineries. Australian conglomerate Wesfarmers and SQM from Chile have embarked on a joint venture to produce up to 50,000 tonnes per year of lithium hydroxide in Australia from 2024. The Australian lithium group Albemarle and Mineral Resources of Australia plan to produce 50,000 tonnes per year starting this year.

Total global lithium production in 2021 was 485,000 tonnes equivalent to lithium carbonate, according to Australian Government data.

Toby Blingham, portfolio manager and trader at Redpoint Investment Management, said the concentration of lithium production in China is worrying. “The fact that some of these materials are going to become so important means you need a variety of supply. You can not risk it coming from one place.”

He said activity in Australia would protect Quinana’s production from geopolitical risk. “They will have to run the operations under Australian government. [So] “If it’s based in Australia, you’re getting rid of the geopolitical risk,” he said.

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Australian refinery close to producing country’s first lithium hydroxide for batteries Source link Australian refinery close to producing country’s first lithium hydroxide for batteries

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