Wesfarmers and Sociedad Quimica y Minera de Chile (SQM) have pulled the trigger on the $US1.4 billion ($1.8 billion) Mt Holland lithium project in Western Australia.
The joint venture (JV) partners plan to share an equal amount of investment to develop the project, with the full funding to be committed upon receiving environmental approvals for the Kwinana refinery.
Wesfarmers expects to receive these early in the 2022 financial year, followed by the construction of the mine, concentrator and refinery in the first half of the year.
The JV anticipates to initially produce 50,000 tonnes of lithium hydroxide battery grade starting the second half of 2024.
It is set to expand Mt Holland’s capacity for mining and refining production at a future date, purchasing higher capacity equipment to support this.
The final investment decision (FID) follows the JV partners’ deferral last year as they furthered the definitive feasibility study for Mt Holland.
Wesfarmers managing director Rob Scott said that the work completed by the JV team over the last 12 months had allowed the FID to be taken with increased engineering definition, providing increased confidence in scheduling and cost estimates.
“The development of the Mt Holland lithium project presents an attractive investment for Wesfarmers shareholders,” Scott said.
“The project capitalises on our chemicals, energy and fertilisers divisions’ chemical processing expertise and Western Australia’s unique position to support growing global demand for electric vehicle battery materials which will make a crucial contribution to global efforts to reduce greenhouse gas emissions.
“We have been pleased with progress of discussions with key battery manufacturers, which reflect a positive outlook for battery quality sustainably sourced lithium hydroxide.”
SQM chief executive Ricardo Ramos said the company was pleased with the decision to take the FID on the Mt Holland project.
“We remain confident regarding the outlook for the lithium market and believe that Mt Holland is a high-quality project that will play an important role supporting increased demand for electric vehicle batteries,” he said.
Ramos expects the lithium industry to grow at a rate of around 20 per cent a year in the long term, reaching 800,000 to a million tonnes by 2025.