Western Australia to offer support for struggling lithium industry
MELBOURNE, Nov 28 (Reuters) -Western Australia will offer a fee payment holiday for companies producing lithium hydroxide as well as lithium developers in the ramp up stage of operations to ease pressure on the industry battling a prolonged price downturn for the battery material.
Australia produces around half of the world's lithium but a near two-year downturn has forced a swathe of lithium producers to postpone expansion plans or cut production.
Proposed fee waivers will apply for up to two years, and for lithium developers will apply to port charges and mining tenement fees.
The state government will also offer an interest free A$50 million loan facility to help lithium miners under pressure to sustain their operations, it said in a statement. The total package is worth A$150 million.
The interest free period will cease after average lithium spodumene prices exceed $1,100 per tonne for two successive quarters, or by June 30, 2026 if not stopped before then. Spodumene prices last traded at $790 a tonne.
"The support package is practical and accessible immediately and will provide some genuine relief to industry," CEO Raj Surendran of Tianqi Lithium Energy Australia (TLEA) said in a statement. TLEA is a tie-up between China's Tianqi Lithium 002466.SZ and Australia's IGO IGO.AX.
However, more support from state and federal governments is required for the industry to grow while still meeting its emissions targets, Surendran added.
Among Australia's two other hydroxide producers, Albemarle ALB.N halted construction of a production line at its Kemerton facility and idled a second mid year due to depressed market conditions, while Wesfarmers WES.AX is proceeding to build out its Mt Holland lithium hydroxide project with Chile's SQM SQMA.SN.
In the 2023-24 financial year, lithium miners generated A$8.4 billion in sales and delivered A$710 million in state royalties, the government said.
($1 = 1.5394 Australian dollars)
Reporting by Melanie Burton; Editing by Chris Reese
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