PERTH (miningweekly.com) – Joint venture (JV) partners Wesfarmers and partner Sociedad Quimica y Minera de Chile S.A (SQM) have taken a final investment decision on the Mt Holland lithium project, in Western Australia, and have committed to initial funding.
ASX-listed Wesfarmers said on Wednesday that full funding would be committed to the project once environmental approvals for the Kwinana refinery had been received, which was anticipated early in 2022.
The JV partners early in 2020 took the decision to defer a final investment decision at Mt Holland, in lieu of the JV vehicle Covelent Lithium undertaking additional actions to enhance the long-term value of the project.
Covelant has now completed an updated definitive feasibility study (UDFS), which has provided greater certainty around the project’s engineering design and capital and operating costs, as well as an increase in concentrator and refinery production capacity from 45 000 t/y to 50 000 t/y of battery grade lithium hydroxide.
The UDFS included increased flexibility to provide for a second phase of the project to expand production capacity at both Mt Holland and the Kwinana refinery, with Wesfarmers noting that preliminary work to evaluate expansion options would start in parallel with the construction of the first phase of the project.
“The development of the Mt Holland lithium project presents an attractive investment for Westfarmers 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 the global efforts to reduce greenhouse gas emissions. We have been pleased with progress of discussions with key battery manufacturers, which reflect a positive outlook for battery quality, sustainably sourced lithium hydroxide,” said Wesfarmers MD Rob Scott.
Development of the integrated project remains subject to the Western Australian Environmental Protection Authority's assessment of the Kwinana refinery and the issuance of a Ministerial Statement to allow works to commence.
Following receipt of all relevant approvals, construction of the mine, concentrator and refinery are expected to start in the first half of 2022, with purchase of long lead time items starting in late 2021. The first production of lithium hydroxide is expected in the second half of the 2024 calendar year. Wesfarmers’ share of capital expenditure for the development of the project is estimated at $950-million and will be funded using existing cash and debt facilities.