Production has tumbled at Australia’s first lithium hydroxide refinery in WA, extending a run of setbacks in the country’s attempt to move into battery metal refining.
The Kwinana refinery operated by Tianqi Lithium produced just 142 tonnes of the battery-grade chemical in the three months to June 30, the project’s joint venture partner IGO said in its June quarter update on Monday. That was down 85 per cent from the March quarter, and a tiny fraction of its goal of 24,000t a year.
The figure was “significantly below expectations” and was due to “ongoing technical challenges following the scheduled shutdown during the quarter,” IGO said. Its shares fell as much as 5.3 per cent to a three-month low, before trading down 4.6 per cent to $13.81 at 11.50am.
IGO gave no production guidance for the 2024 financial year, but said it will aim to reach 50 per cent capacity by the end of 2023. In May, acting chief executive Matt Dusci said he hoped to reach 60-70 per cent of its target capacity by the end of 2023.
Australia is the world’s biggest producer of lithium, a vital ingredient in electric vehicle batteries, but the vast majority of that is shipped as ore to China for refining.
China’s Tianqi Lithium Energy Australia is one of three groups attempting to build an onshore refining industry, spurred on by growing demand from US and European carmakers for lithium that bypasses Chinese refineries altogether.
The move into downstream production has proved more difficult than expected. The other Australian refineries, operated by US lithium producer Albemarle and Australian conglomerate Wesfarmers, have also struggled to meet production targets.
In more positive news, IGO reported a sharp rise in production at the Greenbushes lithium mine, the largest in the world, which it holds in a joint venture with Tianqi and Albemarle.
The mine in WA produced 395,000t of spodumene concentrate, a lithium-bearing ore, up 11 per cent on the previous quarter. Sales volumes was up 28 per cent and revenue was up 23 per cent quarter on quarter, IGO said.
Bloomberg