PERTH (miningweekly.com) – First lithium hydroxide from Covalent Lithium’s Kwinana refinery, in Western Australia, has been delayed by six months until the first half of 2025.
ASX-listed Wesfarmers, which jointly owns Covalent with Chile's SQM, on Wednesday told shareholders that while labour availability and supply chain constraints have been well managed by Covalent, these pressures together with refinery engineering delays and Covid-related restrictions affecting the delivery of key capital items sourced from offshore have impacted cost and timing expectations for the project, including completion of the Kwinana refinery.
Furthermore, Wesfarmer’s share of capital expenditure for the overall project has also increased by between 10% and 20%, from the previous guidance of A$1.09-billion to between A$1.2-billion and A$1.3-billion.
The delayed production of the first lithium hydroxide product from the Kwinana refinery is expected to be partially offset by the early sale of spodumene concentrate from the Mt Holland lithium mine, which is expected in the 2024 calendar year.
Wesfarmers said that construction of the mine and concentrator was well advanced, and the first earnings from the mine are expected in the first half of 2024, as sales of spodumene concentrate ramp up prior to the start of production at the Kwinana refinery.
Covalent is hoping to produce 50 000 t/y of lithium hydroxide at the refinery, once the plant has been completed, with Mt Holland expected to deliver more than 380 000 t/y of spodumene concentrate.
Meanwhile, Wesfarmers on Wednesday also told shareholders that the company was continuing to invest in growth opportunities across its business, and had applied for environmental approval to expand its ammonia production capacity, which will lower the reliance on imports.
The timing of a final investment decision on this project is dependent on regulatory approvals.