Plans for a $1 billion lithium plant for the Pilbara in Western Australia are raising eyebrows across the industry and have locals curious about what the proponents are proposing.
UK chemical firm Alkemy Capital Investments has announced plans to build a four-train lithium sulphate refinery (LSM) in Port Hedland thanks to its increased use of electric vehicle batteries and renewable energy technology.
“Lithium demand is increasing…demand is expected to grow over 600 percent over the next decade, so it’s absolutely booming right now,” Alkemy business manager Alex Della Bosca said.
Under plans, the company would refine 180,000 tonnes of concentrate into lithium sulfate before further offshore processing takes place.
In the longer term, 720,000 tonnes of spodumene concentrate processed each year at the Port Hedland site would produce 96,000 tonnes of lithium hydroxide, all to supply Europe’s fast-growing electric battery market.
Ms Della Bosca said that most of the lithium exported out of Australia was currently in a spodumene concentrate containing 6 per cent lithium and 94 per cent waste.
“It doesn’t make sense for us to load our ships with waste to decarbonize the shipping industry, so what we want to do is get as much of the post-processing back to WA as possible before shipping it to the UK,” he said. .
Approvals are ongoing, but Ms. Della Bosca said the four-train refinery would be built in an area near the Pilbara Port Authority’s proposed battery metals hub, Lumsden Point, and cost around $1bn. .
“We’re in the very early stages right now and haven’t released our numbers yet, but looking at similar projects within this space, they’re set at around $200 million to $250 million per train.”
Port Hedland part of the ‘lithium century’
Billions of dollars worth of iron ore leaves the port, WA’s busiest, every year, but nothing is processed on land.
The value of WA iron ore sales rose to a record $157 billion in 2021, of which Port Hedland accounted for 61 percent, according to the state government.
Lithium exports have also increased, reaching a record $1.7 billion last year.
Port Hedland mayor Peter Carter described Alkemy’s plans as a “fantastic opportunity” for the city to diversify away from reliance on iron ore exports.
“Although it is still in the early stages, it holds great promise for Port Hedland,” said Cr Carter.
“One of the best things is the diversification of our city – everyone knows that Port Hedland’s growth is based on iron ore, iron ore and iron ore.
“But all these other startups, growing our city with another 10,000 to 15,000 people outside of the iron ore sector in the renewable areas and other areas like that, it’s great for our city.”
Lithium industry veteran and chairman of the International Lithium Association Anand Sheth said Port Hedland had been considered for further processing for years but was not viable until now.
“[Downstream processing] It’s a very good next step for Australia,” he said.
“I have been in this industry for 22 years and in the past it was not very practical to do so due to price and cost.
“But now, it’s supportive: the whole industry, the whole value chain supports this downstream processing in Australia.”
Sheth said the Pilbara Port Authority’s investment in container shipping had been the “most critical point” for this viability.
“I think everything is ready for Port Hedland to have that downstream processing today or tomorrow.
“This is the century of lithium.”
Porting a ‘perfect’ location
With the latest Pilbara mining boom underway and a national shortage of labor and construction materials, Della Bosca said Alkemy was “well aware” of the challenges it faced building a refinery in the region.
Proximity to lithium mines in the Pilbara, as well as the port of Port Hedland, the world’s largest bulk export port and Australia’s largest container export port, made it an ideal location, he said.
“It just makes sense to us; we both speak the same language and in so many different ways.
“It’s a world-renowned port, it’s the perfect place for us to build our lithium sulfate refinery.”
Opportunities to diversify from China
While Europe is well known for its vehicle production, Ms Della Bosca said it was an emerging market for lithium processing.
She hoped Alkemy’s plans would give Australian miners an alternative market for their product, with China dominating lithium refining.
“[China] they’re going to need all the lithium they’re refining for their own net-zero targets, so we’re seeing new markets like Europe grow and they’re going to need their own lithium capacity,” Della Bosca said.
“We are seeing that in particular WA miners want to diversify who they are selling to, they want to de-risk their portfolio in some way, so they want to access the European market.”
‘Lofty’ timelines consulted
But Martin Jackson, a senior analyst at UK-based CRU Group, described the plans as “interesting” and the proposed timeframes as “lofty”.
“No one has done anything like this before,” he said.
Jackson said the Tees Valley lithium hydroxide facility, which would be supplied by the Port Hedland LSM refinery, was expected to be in production by 2024.
Given current Australian production rates, he also believed that Alkemy would have difficulty obtaining enough spodumene to sustain production from the proposed plant.
“[The timeline] It’s certainly something I raised my eyebrows at; The expectations for 2024 are not far off.
“It feels like a huge ambition. I’m not saying it’s not possible, but it seems like a very fast timeline to me.”
In initial estimates, 300 jobs were expected during the construction of the 1 train at Port Hedland, with 180 operational positions underway.
Leave a Reply