Galaxy Resources, Pilbara Minerals and Altura Mining are set to receive a royalty rebate from the Western Australian Government.
The three producers will receive a 50 per cent royalty rebate on spodumene concentrate for up to 12 months, on the conditions that they have an operating project and retain most of their employees.
The rebate is also applicable only when the average price of spodumene concentrate is under $US550 ($747 million) per tonne for a given quarter.
Spodumene concentrate prices hover at around $US400 per tonne this year.
Benchmark Minerals Intelligence forecasts that spodumene concentrate prices would increase as early as next year, but would only touch $US550 million around 2023.
Galaxy Resources also expects lithium pricing environment to only strengthen from late 2022.
“Over the past two years the fall in the price of spodumene concentrate has put these companies’ operations at risk and their finances under pressure…,” Western Australia’s Mines and Petroleum Minister Bill Johnston said.
“…Supporting these producers could prevent the loss of more than 600 jobs and save more than $20 million in annual royalty revenue over the coming years.”
Pilbara Minerals will use the rebate on its Pilgangoora lithium-tantalum project in Western Australia, which company managing director Ken Brinsden said would assist the company as it navigated this period of lower pricing.
At the conclusion of the assistance period, all three companies will be required to repay the rebate over a period of two years.
“This assistance, in addition to the Future Batteries Industry Strategy’s Ministerial taskforce released by the state government (on Monday) which Pilbara Mineral is pleased to be a part of, demonstrates the significance of the critical minerals industry to Western Australia’s economy, our need to remain globally competitive and the important part that Western Australia plays in the lithium ion supply chain,” Brinsden concluded.