Wesfarmers and SQM Greenlight Mt Holland Lithium Project Expansion to Double Output by 2030

Mt Holland Lithium Project: A Strategic Growth Asset for Wesfarmers in Western Australia

Wesfarmers operates the Mt Holland lithium project through Covalent Lithium, a joint venture equally owned by Wesfarmers and SQM. Located in Western Australia, the project integrates mining, concentrating, and processing operations, making it a key asset in Wesfarmers’ energy and commodities portfolio. The facility extracts spodumene ore, a lithium-bearing mineral, and processes it into high-grade spodumene concentrate for global battery manufacturers and downstream processors.

Currently, the project has a nameplate capacity of approximately 380,000 tonnes of spodumene concentrate annually on a 100% basis. This production supports Wesfarmers’ exposure to the rapidly expanding lithium market driven by demand for battery materials used in electric vehicles, energy storage, and renewable energy infrastructure. Mt Holland is recognized as a world-class, integrated lithium operation due to its operational efficiency, ore quality, and strategic location.

Final Investment Decision to Double Production Capacity: Expansion Details and Timeline

On 22 July 2026, Wesfarmers and SQM announced a joint final investment decision to significantly expand the Mt Holland operation. The expansion will increase spodumene concentrate production capacity to 760,000 tonnes per annum (100% basis), effectively doubling output. This will be achieved by constructing a second concentrator alongside the existing facility, enabling economies of scale and reducing unit operating costs.

Construction of the second concentrator is expected to commence in the second half of 2027, with first spodumene concentrate production from the expansion anticipated in the first half of 2030. The multi-year timeline includes engineering, procurement, and infrastructure preparation. Necessary government and regulatory approvals have been secured or are progressing to support the project.

New Ore Sorting Facility to Unlock Value from Stockpiled Lithium Material

A major component of the expansion is a new integrated ore sorting facility designed to process approximately three million tonnes of previously stockpiled material unsuitable for conventional processing. This facility will significantly enhance resource utilization and extend the economic life of the Mt Holland operation.

The ore sorting technology segregates ore grades, allowing lower-grade or uneconomic stockpiled material to be reprocessed into saleable spodumene concentrate. This capital-efficient method maximizes value extraction from existing assets and contributes substantially to the expansion’s production increase and economic returns.

Capital Expenditure and Funding Strategy

Wesfarmers’ share of capital expenditure for the expansion is estimated between $645 million and $715 million (USD 450–500 million), excluding capitalised interest and life-of-mine capital costs. Funding will come from existing cash reserves and debt facilities, demonstrating Wesfarmers’ financial strength to pursue growth without issuing new equity.

This funding approach reflects management’s confidence in the project’s cash flow potential and return on investment. It also helps minimize shareholder dilution while maintaining financial flexibility. Further details on financial metrics and strategic context will be provided at Wesfarmers’ full-year results announcement in August 2026.

Production Growth Aligns with Global Lithium Demand and Cost Efficiency

The expansion responds to strong global demand for lithium products used in batteries and energy storage. Doubling production to 760,000 tonnes per annum positions Wesfarmers to capture market growth while leveraging integrated operations to lower unit costs. Managing Director Rob Scott emphasized that the expansion delivers economies of scale, reducing operating costs and enhancing shareholder returns.

Cost savings stem from spreading fixed infrastructure expenses over increased output, improving operational efficiency, and optimizing logistics and energy use per tonne. These efficiencies strengthen Mt Holland’s competitive position on the global lithium cost curve, supporting attractive margins through price cycles. The expanded spodumene concentrate volumes will be sold globally, supplying battery manufacturers and lithium refiners.

Integration Potential with Covalent Lithium’s Kwinana Refinery and Future Downstream Expansion

The Mt Holland expansion offers strategic flexibility to support potential growth at Covalent Lithium’s Kwinana refinery in Western Australia. While initial expanded output will be sold as spodumene concentrate, future integration with lithium hydroxide or lithium carbonate refining may be pursued if market conditions and returns justify further investment.

This option preserves the potential for vertical integration, enhancing value creation through downstream processing. The Kwinana refinery refines spodumene concentrate into battery-grade lithium products. Maintaining supply flexibility allows Wesfarmers and SQM to evaluate market demand, regulatory factors, and capital returns before committing to downstream expansions.

Enhanced Competitive Position and Cost Curve Advantages

Rob Scott highlighted that Mt Holland is a world-class integrated lithium operation, and the expansion improves its global cost curve position. Lower unit production costs are critical for profitability and competitiveness amid commodity price fluctuations. The expansion’s scale and cost efficiencies reduce the risk of uneconomic operation during price downturns.

Improved cost positioning is vital as new lithium projects globally may pressure prices. By reducing unit operating costs, Mt Holland sustains attractive returns across various lithium price scenarios, bolstering business resilience. This cost advantage supports expected strong shareholder returns and production flexibility to meet customer demand.

Regulatory Approvals and Governance Structure

Wesfarmers confirmed that all necessary government and regulatory approvals for the expansion have been secured or are in progress. This includes environmental clearances, mining permits, and statutory consents. The completion of the definitive feasibility study and joint investment decision reflect high management confidence in regulatory compliance.

The expansion is governed through Covalent Lithium, the joint venture equally owned by Wesfarmers and SQM. Joint approval of the investment decision demonstrates alignment on the project’s technical, financial, and strategic merits. Regulatory compliance ensures long-term operational sustainability and community support in Western Australia, underscoring Wesfarmers’ commitment to responsible mining.

Strategic Growth and Shareholder Value from Leveraging Existing Assets

Wesfarmers’ Mt Holland expansion strategy focuses on value creation by investing follow-on capital into an operational, integrated lithium mining and processing asset. This brownfield expansion leverages existing infrastructure, power, logistics, and operational expertise to achieve lower capital intensity and unit costs compared to greenfield projects.

Managing Director Rob Scott stated the expansion showcases Wesfarmers’ ability to utilize its asset base and infrastructure to deploy capital efficiently, enhancing shareholder returns. The estimated $645–715 million capital expenditure to double production equates to approximately $850–940 per additional tonne of annual capacity, illustrating the efficiency gains from expanding an integrated operation.