Lithium Power International details how Western Australia’s extensive lithium mining projects will be critical to achieving carbon neutrality
Lithium fever is into its third year in Western Australia, and it shows few signs of slowing. Hard rock lithium mining projects are being commissioned as global prices for the battery mineral soar. Plans to upgrade lithium ore, or spodumene, to battery grade are also on the slate as concerns about value adding and energy security ramp up. New projects are being revealed with increasing frequency, thanks in part to a supportive business environment.
As the world’s single largest lithium region, ahead of Chile, the Australian state has a critical role to play in the world’s energy future. S&P Global’s vice chairman, Daniel Yergin, recently stressed the importance of the country in boosting mineral supplies for renewable technologies. The Pulitzer Prize winner gained global recognition in 2011 when he criticised a widely held belief that soaring oil prices would cause a global economic crisis. Instead, he said it would stimulate production. The same conviction is proving true now with lithium. Last month, in Sydney, Yergin told an energy forum that the resilience of lithium supply chains and their security would be important in reaching current climate goals. “Australia will have a very important role to play in the new supply chains for net zero,” he said.
Australia is well endowed with hard rock lithium deposits, especially in Western Australia. Indeed, it ranks ahead of Chile as the world’s leading producer. Right now, the comparative ease in planning new projects, strong government support and rising global demand provide a significant edge. Downstream processing plants are also being constructed to ensure that the value of lithium exports can be maximised, rather than only shipping lithium ore to offshore processors.
Lithium Power International’s lithium mining interests
The giant Greenbushes lithium mining project operates in the south-west of the State, near Bunbury. A slew of newcomers, including Lithium Power International, have been quick to peg nearby leases because there are enticing signs that the mineralisation spreads beyond the ground held by the mine’s owners, Tianqi Corp and IGO (51%) and Albemarle Corp (49%). Greenbushes has been running in one form or another for 137 years, initially producing tin, tantalum and lithium from alluvial deposits. It eventually switched to hard rock mining, and it was only in the late 1970s that the potential for high-grade lithium spodumene was taken seriously. The first lithium was produced in 1983, and the mine has been expanded since. Plans are awaiting approval for a third chemical grade lithium plant and a tailings retreatment operation. These projects will provide feedstock for two new lithium hydroxide plants, one to be run together by Tianqi and IGO and the other by Albermarle.
Lithium Power International is keenly interested in current developments at Greenbushes because it owns lithium tenements that abut the mine leases. The company has recently agreed to buy four additional tenements to make it the largest holder in the area. It recently completed a ground penetration radar survey to test for concealed pegmatites. Laboratory results show the area is regionally anomalous in lithium, and a larger sampling program is being completed.
LPI intends to sell its West Australian assets into a new entity called Western Lithium Ltd so that it can focus attention on developing the Maricunga lithium project in northern Chile with a pre-tax net present value of US$1.97 billion in northern Chile. Approval has been received from the Australian Securities Commission in preparation for the demerger. A new board is expected to be appointed once market conditions improve so that the business can be listed on the Australian Securities Exchange. Existing LPI shareholders will receive shares in the new company and a capital raise will occur to fund ongoing exploration.
LPI has a second grouping of assets in the Pilbara region of Western Australia, inland from Port Hedland. A soil sampling program was completed at Pilgangoora recently, aimed at assessing lithium anomalies outlined in previous work. There is also the possibility of gold mineralisation, given the recent nearby discovery by De Grey Mining of a six-million-ounce-plus deposit at their Hemi deposit. Other lithium projects lie slightly to the north, at Tabba Tabba and Strelly. In the Eastern Goldfields region, about 650km east of Perth and close to the mining town of Kalgoorlie, two more groupings of tenements have been acquired by LPI.
The extent of Western Australia’s lithium potential
Notable among the others miners operating in Western Australia are Allkem, Mineral Resources and Liontown Resources. The first of the three, Allkem, was formed last year via the $A4 billion merger of Galaxy Resources and Orocobre. It has mining and processing operations in Argentina, Australia, Japan and North America. Its largest single asset is Mt Cattlin in Western Australia’s north-west, but production is slowing, and cash costs are rising as reserves diminish. The company, however, has embarked on a significant drilling program at depth and along strike to extend the mine life.
Mineral Resources has been mining nearly 2 million tonnes of spodumene concentrate in recent times from its half-owned Mt Marion mine. The material is toll converted in a lithium hydroxide plant in China by Genfeng. The company this year intends to commission its own hydroxide processing plant at Kemerton in a 40/60 joint venture with Albermarle, and add a second train next year.
Liontown differs from the first two because it is newly listed on the Australian Securities Exchange, but has a significant lithium resource north of Kalgoorlie. It has 156 million tonnes grading 1.4% lithium oxide. Its ambitions are supported by a $A463 million capital raising last December, a $A300 million debt facility with Ford and binding offtake agreements with Tesla and LG Energy. This backing should be sufficient to take its Kathleen Valley mine into full production, and yield enough returns to develop its own downstream processing plant after year six of operation.
