Lithium processors will not have to pay dues to the Western Australian government for the next two years as part of a $150 million package to keep the battery material sector afloat as prices remain low.
On Wednesday, the state government announced plans to waive $90 million worth of fees that would otherwise need to be paid to government trading enterprises like DevelopmentWA and electricity retailer Synergy to sustain downstream processing of lithium.
There are currently two operating battery-grade lithium hydroxide processing facilities in Western Australia, but both have failed to meet expected production capacity amid the low commodity price due to oversupply.
The Lithium Industry Support Program’s fee waivers for lithium processors will be delivered over the next 24 months. Lithium miners will have port charges and mining tenement fees to the value of $9.37 million over the same period.
$50 million worth of interest-free loans have also been made available to lithium miners to help them remain open if they can demonstrate their current financial position and operational plan.
The loans must be repaid in quarterly payments after the interest-free period ends – either by 30 June 2026, or if spodumene lithium ore prices exceed US$1,100 per tonne for two successive quarters.
In August, spodumene prices averaged US$857 a tonne, hitting a three year low well beneath the December 2022 peak of nearly US$6,500.
Federal resources minister Madeleine King welcomed the funding package, which will help support the industry in the period before critical minerals production tax credits are expected to become available in the 2027-28 financial year.
“It is vital we continue to support this industry so that we step up to our global responsibility to secure supply chains for critical minerals and rare earths globally,” Ms King said.
China currently dominates lithium hydroxide production, making up more than 80 per cent of global output according to the International Energy Agency. Although Australia produces more than half of the world’s lithium supply, almost all of it is exported to China for processing.
Ms King also slammed federal Opposition leader Peter Dutton’s decision to oppose the Future Made in Australia tax credits as a “slap in the face for resources workers across the country”.
Mr Dutton has argued that projects should be sustainable on their own footing, previously describing the credits as “billions for billionaires”.
Tianqi Lithium Australia’s Kwinana facility – one of two operational lithium hydroxide processing facilities in WA – has persistently produced at levels below its maximum production capacity of 24,000 tonnes, with plans for additional production lines hit by delays.
Meanwhile, United States-based Albermarle has closed one of its two production lines at its Kemerton facility and axed around 300 jobs after its first production line also failed to hit its maximum production capacity of 25,000 tonnes.
A third plant being developed by Wesfarmers and Chilean firm SQM has also experienced delays, although the partners are working towards bringing the facility online in mid-2025.
Western Australian Premier Roger Cook said lithium sits at the centre of the state’s “economic diversification story, as we work to position our State as a global leader in downstream processing”.
“This package will provide important temporary and responsible support for WA’s fledgling lithium industry, taking into account the extremely challenging market conditions it is facing,” he said.
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