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Highlights
- Fee Waivers: Lithium hydroxide producers and developers in the ramp-up phase of operations will receive a fee payment holiday for up to two years.
- Interest-Free Loans: A AU$50 million interest-free loan facility will be available to lithium miners under financial strain.
- Industry Struggles: The two-year downturn in lithium prices has forced many Australian producers to scale back production or delay expansion plans, despite the country producing nearly half of the world’s lithium.
Western Australia has unveiled a AU$150 million support package to assist lithium hydroxide producers and developers struggling with a prolonged price downturn in the battery material market. The initiative, announced by the state government, aims to ease financial pressures on the industry and sustain operations critical to the global energy transition.
Industry Response
Raj Surendran, CEO of Tianqi Lithium Energy Australia (TLEA), welcomed the package, calling it a "practical and accessible" measure that provides immediate relief. However, he emphasized the need for additional state and federal support to help the industry grow while achieving emissions targets. TLEA is a joint venture between China's Tianqi Lithium and Australia's IGO.
Despite the relief, some producers remain cautious. Albemarle, another major player, halted construction of a production line and idled a second at its Kemerton facility earlier this year due to depressed market conditions. Wesfarmers, in partnership with Chile's SQM, continues to advance its Mt Holland lithium hydroxide project.
Economic Context
In the 2023-24 financial year, lithium miners in Western Australia generated AU$8.4 billion in sales and contributed AU$710 million in state royalties. However, the downturn has highlighted vulnerabilities in the market, as producers grapple with lower prices and rising operational costs.
The government’s support package aims to bridge the gap during this challenging period, ensuring the sector remains viable and ready to capitalize on future demand for lithium, a critical component of electric vehicle batteries and renewable energy storage.
