The Western Australian Government is propping up the state’s lithium sector to the tune of $150 million after the industry has experienced “a sudden and unexpected plunge in the price of lithium this year”.
Premier Roger Cook says the government is acting to provide assistance to Western Australia’s critical lithium industry, supporting thousands of local jobs and the state’s push to become a global battery minerals processing hub.
Through the Lithium Industry Support Program, Government Trading Enterprises (GTEs) including DevelopmentWA, Synergy and Water Corporation will temporarily waive government fees to support the continuation of downstream processing of lithium, for up to two years, to a total value of $90 million.
To support lithium miners in the ramp-up phase of their project, port charges and mining tenement fees will be waived for up to 24 months, to the value of $9.37 million.
A $50 million loan facility will also be available to help lithium miners access temporary interest-free loans to help sustain their operations, based on demonstrating their current financial position and operational plan.
Companies will be required to repay the loans through regular quarterly payments over the two years following the end of the interest-free period, which will cease after average lithium spodumene prices have exceeded US$1,100 per tonne for two successive quarters, or by
30 June 2026 if not stopped before then.
The Association of Mining and Exploration Companies (AMEC) welcomes the decision as it continues working with the government, lithium industry members, and broader industry.
AMEC has been calling for support, given the recent downturn in the international spodumene price. The result of which has seen mines go into care and maintenance, companies review operations, and cut jobs
AMEC Chief Executive Officer Warren Pearce says the Lithium Industry Support Program is a comprehensive package to support our industry through tough market conditions.
“It prioritises the protection of jobs now and stabilises the future of an important emerging industry,” Pearce says.
“This a clear and positive signal of support from the WA Government. They have listened and acted accordingly, by backing our emerging industries.”
Cook says WA’s lithium industry supported more than 11,000 local jobs last financial year and has three new lithium hydroxide refineries currently in construction or commissioning.
“Lithium will continue to be an incredibly important element moving forward – particularly for the global energy transition. It is also at the centre of WA’s economic diversification story, as we work to position our State as a global leader in downstream processing,” the Premier adds.
“This package will provide important temporary and responsible support for WA’s fledgling lithium industry, taking into account the extremely challenging market conditions it is facing.
“This package is aimed at helping our critical lithium industry and its workforce to the other side of this turbulent period – supporting local jobs and doing what’s right for WA.”
WA’s lithium industry has grown rapidly in recent years to be the biggest hard rock industry of its type in the world, supplying some 50% of the world’s lithium.
In the 2023-24 financial year, lithium miners generated $8.4 billion in sales and delivered $710 million in state royalties.
However, the industry has experienced a sudden and unexpected plunge in the price of lithium this year, which has prompted some mine and processing plant suspensions and impacted jobs.
In response, the state government will provide support to lithium miners in the ramp-up phase of production and downstream processing facilities for a period of up to 24 months, after which lithium prices are expected to recover to an economically sustainable level.
Deputy Premier Rita Saffioti says the response recognises WA’s lithium industry plays a huge role in our state’s economy, providing jobs for thousands of Western Australians.
“Lithium forms an incredibly important part of not only decarbonising our own economy, but supporting the entire global decarbonisation effort. We’re very aware of the challenges the lithium industry is facing at the moment, and it’s in every Western Australians’ interest the industry gets the assistance it needs,” she says.
Lithium is a key element in the global energy transition as the world moves to achieve a goal of net zero emissions by 2050.
Write to Adam Orlando at Mining.com.au
Images: Core Lithium
