Between cow pens and gum trees, 160km south of Perth, 2,000 hectares of land are designated as a strategic commercial domain for heavy industry and further processing.
“This is your chance,” reads the orange sign that marks the exit of the road leading to Kemerton Industrial Park.
Albemarle’s lithium hydroxide plant in Kemerton, Washington.
But U. S. lithium giant Albemarle is one of the few companies that has seized the opportunity in the four decades since Kemerton established itself as a priority commercial zone with a reserve of more than 5,000 additional hectares of greenery.
Albemarle’s mammoth chemical processing plant, located on 80 hectares of land in Kemerton, is one of three lithium hydroxide plants currently built or operational in Western Australia.
These projects are rare evidence that enthusiasm for Australia’s move towards further processing of critical minerals translates into more than just a political fantasy. But the reassuring concept of a green, decarbonized world still calls for complex and dangerous chemical production industries.
Albemarle is one of the few corporations globally that has highly specialized generation and intellectual assets to produce lithium hydroxide, a component for lithium batteries in electric vehicles.
With the exception of Chile’s SQM, all the corporations are Chinese, and Albemarle itself operates four lithium hydroxide plants in China.
China’s Tianqi and Australia’s IGO also have a lithium hydroxide plant that is ramping up operations in Kwinana, closer to Perth. Wesfarmers is partnering with SQM to build a lithium hydroxide plant at Kwinana, which is expected to start production next year.
The quality of the hard-rock lithium deposit at WA’s Greenbushes mine, of which Albemarle owns 49% along with Tianqi and IGO, convinced the U. S. company to build its own chemical plant an hour’s drive away in Kemerton to continue processing lithium and spodumene. concentrate. .
It’s also a convenient way to diversify critical materials in the source chain outside of China, which is a sore spot in the U. S. It is designed for consumers who are not aware of the resources of all the components. Australia is the world’s largest supplier of lithium.
Since WA’s plants were the only three outside of China processing spodumene, delays and steep rate increases were inevitable, especially in the COVID and post-COVID era.
Training a new culprit for a complicated and complex chemical procedure, as well as the desire to comply with Australia-specific criteria and regulations, is challenging. Albemarle had to turn to its specialized Chinese technical teams and U. S. engineers to help build a factory based on a Chinese design.
Construction began in 2019, just before the COVID closure of the WA border, which meant its chief operating officer, American Walt Sopp, was stuck in China. But starting in 2022, the plant began exporting lithium hydroxide samples to meet the criteria of car and battery brands in markets such as Japan, South Korea, and soon the United States.
The reassuring concept of a green and decarbonized world still calls for complex and dangerous chemical production industries.
On site, trucks deliver the spodumene into hangars and giant boxes to go through chemical procedures such as calcination and acid roasting at temperatures above 1,000 degrees. Leaching and separation, causticization, crystallization, and then packaging, a two- to three-day procedure to deliver the lithium hydroxide in the form of a fine white powder.
The fact that Albemarle is a globally incorporated corporation valued at $17 billion and only one Australian lithium miner makes it less vulnerable to the recent drop in its value, which has wreaked havoc on other Washington state lithium miners and some billionaires. Albemarle consumers are also expected to take advantage of generous subsidies under the U. S. Inflation Reduction Act.
It’s not that Albemarle is immune to price fluctuations. The U. S. headquarters is the only one in the world. The U. S. government will have to be very happy to have withdrawn from the contest for Liontown Resources last October. In January, it announced an indefinite suspension for a fourth processing train, in addition to the third. in structure and the two that have been increasing their production lately.
The goal remains to produce 100,000 tonnes a year in Kemerton, which would allow 2. 4 million cars to be manufactured elsewhere.
This is on a very different scale to Australia’s reliance on exporting large amounts of LNG or around a billion tonnes of iron ore per year. The global lithium hydroxide market is lately only around 1 million tons per year. But it remains key to Australia’s hopes of encouraging more domestic production.
The housing shortage in Washington state means that Albemarle has built its own housing complex nearby for a large number of transitional structures staff, although the vast majority of its six hundred to 700 permanent employees are local residents.
What’s even more confusing is navigating regulations related to the basics of shared infrastructure, such as rail and electric power, in a country where prices are already incredibly high.
For all the talk that governments want to get approvals and a common user infrastructure instead of “picking winners,” Kemerton is an object lesson in the kind of delays and frustrations that can only discourage timely and discretionary business investments.
Despite Kemerton’s long history, for example, there is still no rail line to the port of Fremantle. A new government study into a possible rail link between Greenbushes and a (non-container-friendly) port in Bunbury doesn’t even include a 10km line. spurs on a blocked Kemerton.
Unlike Kwinana, Kemerton still has a lot of ground to spare. But its strength is already insufficient to allow the expansion of the industry, adding the processing of lithium hydroxide.
This leaves Albemarle helping to fund a new line of force in the park. Albemarle has to pay millions to compensate for the biodiversity of the land needed for the 9km transmission line, as well as for the domain of the plant itself. costly, with the danger of longer delays, once Canberra’s “nature-positive” reforms to augment rather than upgrade local plants come into force next year.
Note to Governments. The downstream processing of critical minerals demands more complicated business decisions than mere political phrases.
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