Albemarle switches off WA lithium refinery at Kemerton despite lithium rebound with hundreds of jobs to go
Albemarle will mothball its last remaining lithium refining operations in WA and make 250 local workers redundant in a decision the US giant has pinned on Western countries’ inability to compete on costs.
Albemarle will mothball its last remaining lithium refining operations in WA and make 250 local workers redundant in a bombshell move the US giant has pinned on Western countries’ inability to compete on costs.
The US chemicals giant’s chief executive Kent Masters said on Thursday that the recent rebound in lithium prices was “not enough to offset the challenges facing Western hard-rock lithium conversion operations”.
The remaining processing train converting spodumene concentrate from the Greenbushes hard rock mine into lithium hydroxide at Kemerton, near Bunbury, will be put on care and maintenance immediately.
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By continuing you agree to our Terms and Privacy Policy.“Idling operations at Kemerton was a difficult decision,” Mr Masters said.
“It follows significant actions we have taken over the past two-and-a-half years to reduce operating costs during an extended period of price volatility in the market.”
Albemarle had marketed its role as an employer in the South West region through its lithium mining and refining operations.
About 375 people work across Albemarle’s operations in the State, and some 250 in employment linked to running the processing refinery will be made redundant in the coming weeks.
While prices for the spoudmene concentrate Albemarle sources from its share of the Greenbushes mine have gone up meaningfully in recent months to above $US2000/t, the US giant said the cost of converting rocks into refined lithium product used to make batteries was too high in Western jurisdictions.
Australia dominates in lithium mining but has struggled to compete with the likes of China in building and running operations that can refine the mineral into products further down the battery-making supply chain.
Albemarle said the Greenbushes mine itself and its Wodgina operations “are not impacted by the Kemerton decision as they remain core components of the company’s strategy”.
The call to abandon lithium refining in WA comes despite Albemarle claiming to had held “positive discussions with the Australian and Western Australian governments”, according to a spokesman.
“The economics for commercial scale hard rock processing are higher in Western jurisdictions,” he said.
“Without sustained pricing at levels that offset higher costs, or customers’ willingness to pay those higher prices – Western hard rock conversion will remain the most challenged aspect of the supply chain.”
With prices in the doldrums, lithium and other critical miners have been supported by various government initiatives to carry them through the downturn and to grow Australia’s export credentials beyond raw materials.
It’s understood Albermarle would have qualified for the Federal Government’s production tax credit due to take effect in 2027.
The New York-listed company pumped the brakes on building a fourth lithium hydroxide processing train in WA in January 2024.
About six months later it halted construction on a third production train and put its second on care and maintenance.
The West Australian revealed last month that Kemerton’s site director stepped away from running the plant, however there were understood to be no other exits at the time.
Association of Mining and Exploration Companies, which successfully lobbied for a 10 per cent tax offset for critical minerals producers, said the decision was “disappointing, but sadly not unexpected.”
“The continued price volatility in the lithium supply chain and ongoing market interventions has made it extremely difficult for value-adding operations across all Western nations,” chief executive Warren Pearce said.
He said the 250 workers were “highly skilled” and would “be in strong demand from WA’s growing resources sector.”
New Chamber of Minerals and Energy WA chief Aaron Morey said the decision represented a “timely reminder of the hard realities of competing internationally to build and sustain downstream industries in Australia”.
Shadow minister for energy Dr Steve Thomas said “issues with the cost and reliable supply of energy” for the operation had only added to the lithium price woes Albemarle had been dealing with.
Albermarle sold off an unused, 386-bed worker accommodation camp it had built with intentions to support the US company’s plans to expand in WA for $32.5 million in April last year.
