[ferro-alloys.com]Mineral Resources’ new US partner at the Wodgina lithium project has dramatically reset the estimated cost of their value-adding processing plant at the remote site to more than $2 billion.

The planned 100,000-tonnes-a-year lithium hydroxide plant is a key part of Mineral Resources’ Wodgina tie-up with battery metals giant Albemarle, which is buying half the Pilbara mining project for $US1.15 billion ($1.6 billion) and contributing technical, production and marketing know-how.

Mineral Resources has yet to put a cost on the plant, but number-crunching this year implied it could build a similar-size operation for $US900 million to $US1.2 billion.

However, in a slide presentation accompanying an investor call on Monday night, Albemarle has estimated the cost of the plant it will design for Wodgina at $US1.6 billion, or $2.2 billion.

Asked about the variance between the estimates, Albemarle chief executive Luke Kissam said the plant design explored by Mineral Resources “wasn’t going to be efficient from an operating standpoint”.

“We have learnt as we’ve been building these plants,” Mr Kissam said, noting that the lithium hydroxide plant Albemarle plans for Kemberton, near Bunbury, was also “more robust”.

“Mineral Resources, to their great credit, has done a great job.

“But they’d tell you the same thing. They’ve never built a lithium hydroxide plant, that’s why they got us.

“So we think ... $US1.6 billion, is more prudent and closer to reality ... having built some.”

The plant, to be jointly funded and operated, will be built in two stages and is expected to begin production from 2022.

Despite Albemarle’s comments, however, Mineral Resources would be confident it could cut the cost of the plant by bringing its own expertise in construction and mining to bear.

The Albemarle deal is expected to close next year.

Albemarle is buying 50 per cent of all mineral rights in the Wodgina tenements — other than iron ore and tantalum — as well as a half-share in the project’s spodumene concentration plant and other infrastructure.

It will also market the entire lithium output to its list of global blue-chip clients.

Together with Kemerton and its share of the expansion of the half-owned Greenbushes mine, near Bridgetown, in WA’s South West, Albemarle is spending more than $3 billion in the State to feed rising global demand for lithium, particularly from car makers seeking to secure product for electric vehicles.

Greenbushes’ owner, Talison Lithium — a partnership between Albemarle and China’s Tianqi Lithium — has embarked on a rolling $800 million-plus expansion of the mine that could lift production of lithium concentrate to 2.8 million tonnes a year, up from 646,000t last year.

The first stage is near completion, a second stage is before WA’s Environmental Protection Authority and a possible third stage is being evaluated by Talison and its owners.

(The West Australian)

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