Proposed lithium refinery in Port Hedland could reduce exposure to iron ore prices

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.

A man in a high visibility jacket stands in front of a pile of rocks.
Alkemy Capital Investments plans to build Australia’s first lithium sulphate refinery.(ABC News: Rachel Pupazzoni)

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.”

Spodumene Rock from Pilbara Minerals
Most of the lithium is exported from Australia in a concentrate containing 6 percent lithium.(ABC News: Rachel Pupazzoni)

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.

a man in a suit stands in front of palm leaves
Peter Carter welcomes companies that can diversify the region’s economy.(ABC News: Eliza Borrello)

“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.”

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