Construction of new WA lithium refinery looms after EPA green light

Construction of Wesfarmers’ West Australian lithium project looks set to commence later this year after its plans for a refinery received a green light from the state’s environmental watchdog.

The refinery will process ore from the Mt Holland mine in the Wheatbelt to produce lithium hydroxide, primarily for use in electric vehicle batteries.

The refinery, which will be built in the southern Perth suburb of Kwinana, is slated to produce 50,276 tonnes of lithium hydroxide a year over a 40-year project life.

Wesfarmers said in an EPA document that would be enough raw material to make lithium-ion batteries for up to about 1.1 million passenger electric vehicles.

The project is being advanced by Wesfarmers, one of Australia’s largest listed companies, via a joint agreement with Chilean chemical company Sociedad Química y Minera de Chile (SQM).

Wesfarmers will spend about $950 million on the project, which will be funded from the company’s existing debt facilities and cash reserves which have been at heightened levels since the 2018 demerger of supermarket Coles.

The Perth-based company said in February it would commit to fully funding the Mt Holland project once environmental approvals for the refinery were received. Environmental approvals for the mine were granted in 2019.

The WA Environmental Protection Authority recommended on Monday that the proposed lithium refinery in Kwinana go ahead with conditions.

The recommendations have been given to the state Environment Minister, who will make a decision following a two-week public appeal period, which was opened on Monday.

If approval is granted, Wesfarmers will begin construction before the end of the year. The first production of lithium hydroxide is expected in the second half of the 2024 calendar year.

The conditions recommended in the EPA report require the joint venture to adhere to certain waste and environmental management rules and a greenhouse gas management plan. It includes limits for the refinery’s net greenhouse gas emissions for every five-year period between the project’s commencement and 2050, at which time it expects to achieve net zero scope one emissions.

The EPA report revealed the total scope one greenhouse gas emissions over the 40 year project life were estimated to be reduced from 6,394,960 tonnes to 2,129,308 tonnes of carbon dioxide equivalent with a raft of mitigation measures.

In its greenhouse gas management plan, the joint venture partners said the refinery was expected to have the lowest initial scope one and scope two emissions intensity for a spodumene refinery in the world.

“The project will support global efforts to decarbonise and enable more effective utilisation of renewable energy,” the plan said.

“The proposal delivers this benefit through the supply of battery-grade lithium hydroxide, which is an essential commodity required to produce rechargeable lithium-ion batteries.”

The Mt Holland project is expected to create more than 1000 jobs during construction and over 350 jobs during its operational phase.

In a statement in February, Wesfarmers chief executive Rob Scott said the project presented an attractive investment for Wesfarmers shareholders.

“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,” Mr Scott said.

Wesfarmers originally acquired the interest in the Mt Holland mine through a 2019 acquisition of junior Kidman Resources but put its final investment decision on hold in January last year to explore ways to optimise and further refine the project.

Extracted from The Sydney Morning Herald

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