Against the arid, red dirt of the Australian Outback, the Mount Holland lithium mine emerges to approaching visitors as a colossal gray-tinged crater, with trucks the size of houses edging along its steep inclines.
An expanding site at the heart of the world’s top lithium-producing region, the A$2.6 billion (US$1.7 billion) operation is emblematic of the plentiful additional supply of the battery material currently weighing on global prices, much of it from this neighborhood. Despite bullish long-term forecasts, the metal has been languishing near two-year lows as demand fails to keep pace.
However, the sprawling mine is also a glimpse of the future for Western Australia, or of what this vast region, defined for decades by the demands of China’s steel industry, hopes would be a new, greener stage of development. The battery ingredient still makes up a sliver of exports but its prospects have already attracted attention — and billions of dollars of investment — from some of the region’s biggest and brashest mining names, from Gina Rinehart to Chris Ellison’s Mineral Resources Ltd.
Illustration: Yusha
Owned by mining giant Sociedad Quimica y Minera de Chile (SQM) and Australian conglomerate Wesfarmers Ltd, Mount Holland is one of the largest operations set up in Western Australia over recent years.
A processing plant opened last month and a refinery is to follow next year, eventually producing enough lithium hydroxide to power close to 1 million new electric vehicles every year for half a century.
The catch is that the plant’s backers are expanding into a glut that has already forced some to hit the pause button, and risk extending a downturn that has battered the industry.
In part, that is an expression of confidence in an eventual recovery in demand. It is also a bet on the role resource-rich Western Australia would play, not only in mining, but also in efforts down the supply chain to counter Beijing’s near-monopoly in processing as the capacity to refine lithium-bearing spodumene into lithium chemicals needed in batteries expands.
The International Energy Agency forecasts lithium demand would increase 40-fold from 2020 to 2021 levels over the next decade and a half, thanks to battery and electric-vehicle demand alone, requiring dozens of extra Mount Hollands.
“It was an adventure for us at the beginning, but now it is the future,” said Ricardo Ramos, chief executive officer of SQM, the world’s second-largest lithium producer. SQM gets most of its production from Chile, but its extraction contract there expires in 2030, leaving the future uncertain.
“I would love to have ten more Mount Hollands in Australia as we speak today — one is not enough,” Ramos said.
Chile has by far the world’s most expansive natural endowment, with its mineral-rich salt flats. However, outside Latin America’s Lithium Triangle, which also includes Argentina and Bolivia, it is Australia that has the world’s most significant reserves of the metal, a vital component for the rechargeable batteries at the heart of the electric revolution.
The ability to extract lithium swiftly from hard rock resources, plus existing infrastructure, means it has already seen something of a development boom. In 2016, there was one producing lithium mine in Western Australia. Today, there are seven. A country that accounted for about a sixth of supply in 2000 now makes up almost half of global mined production, close to double Chile’s output — significant even if China still dominates refining capacity.
In the context of a mining history that dates back close to two centuries, the enthusiasm for the ultra-light metal here is relatively new. Until recently, Western Australia’s heftiest investments were focused on bigger earners, like iron ore, the ingredient that underpins the world’s largest miners. Lithium was used to treat bipolar disorder and even harden glass for perfume bottles.
“It used to be so difficult to get a sale that we had a bell in the office. We used to ring the bell when we’d secure a sale and the whole office would cheer,” said Dale Henderson, chief executive officer of lithium producer Pilbara Minerals Ltd. “We’d ring the site and say ‘turn the plant back on, we’ve got a sale.’ That was only a few short years ago.”
Like others here, Henderson sees the hesitation among investors and some developers, but he argues that the relative youth of the lithium market means last year’s price plunge and flattening electric-vehicle demand should be seen as growing pains.
Certainly the billionaires who made fortunes in iron ore and need a new bet for the future have also continued to pile into the metals of the energy transition. Rinehart’s major known lithium investments alone, with her company Hancock Prospecting, are worth close to US$1 billion at current market prices — before adding copper, rare earths and more.
Still, the question is whether veteran producers, tycoons and indeed Western Australia can parlay previous experience in bulk materials into the ability to mine, process and move down the battery supply chain, making the most of free-trade agreements with the US and other markets to provide the country’s economy with another leg of growth.
All while getting around major hurdles, including a higher carbon footprint than producers like Chile, given the energy intensity of hard-rock processing, and technical challenges around the production of lithium hydroxide that have hampered even heavyweight Albemarle Corp, hit by post-pandemic delays and cost increases.
Australia’s first lithium refinery at Kwinana, a joint venture between Tianqi Lithium Corp and IGO Ltd, began production in 2021 and has since struggled to achieve expected output volumes, while plans for expansion were put on hold.
From the very earliest days, mining has been woven into the fabric of Western Australia, a region about the size of Western Europe with a population half that of tiny Singapore. The industry dates back to a gold rush in the 19th century, but it was China’s economic awakening that created a steel and iron ore boom so expansive that it helped the country’s economy to sidestep the global financial crisis and cushion the impact of the pandemic.
China’s appetite for vast construction projects is now cooling, steel producers are under pressure to clean up a sector that accounts for at least 7 percent of global greenhouse gas emissions and earnings from Australia’s iron ore are expected to fall — from A$136 billion this fiscal year to just A$83 billion by 2028 to 2029, Australian government forecasts showed.
Lithium will not fill that gap anytime soon. Even in 2028 to 2029, exports are forecast at slightly more than A$9 billion.
To expand the impact of the lithium boom and the benefits in export revenue and job creation, Western Australia would need to extend its geological advantage and double down on other battery materials, including copper, all with some policy assistance. After its critical minerals strategy last year, Australia’s government says it is planning further measures to support downstream processing.
Citi analyst Kate McCutcheon says that Australia has advantages — plentiful hard-rock lithium resources, the potential to benefit from a price premium for suppliers compliant with the US Inflation Reduction Act and the green prize of keeping more processing close to home.
However, there are still challenges, including high costs and energy supply, not to mention the need to manage lithium hydroxide’s limited shelf life — typically it starts to degrade after six months — short of expanding further into battery production.
“You’re competing against other countries which in some sectors are offering attractive tax holidays, lower labor and energy. Downstream projects to date outside of China have proven much harder to operate than expected, with costs a lot higher,” McCutcheon said.
Back at Mount Holland, Western Australia Premier Roger Cook says that last year the rise of lithium in the mining region brought in more royalties than the gold fields. The state, and Australia, would be here for the next act.
“Let’s not lose perspective,” he said, speaking over the crunching of crushed ore. “Demand is still growing and we will be here to meet it.”
Taiwan is a small, humble place. There is no Eiffel Tower, no pyramids — no singular attraction that draws the world’s attention. If it makes headlines, it is because China wants to invade. Yet, those who find their way here by some twist of fate often fall in love. If you ask them why, some cite numbers showing it is one of the freest and safest countries in the world. Others talk about something harder to name: The quiet order of queues, the shared umbrellas for anyone caught in the rain, the way people stand so elderly riders can sit, the
Taiwan’s fall would be “a disaster for American interests,” US President Donald Trump’s nominee for undersecretary of defense for policy Elbridge Colby said at his Senate confirmation hearing on Tuesday last week, as he warned of the “dramatic deterioration of military balance” in the western Pacific. The Republic of China (Taiwan) is indeed facing a unique and acute threat from the Chinese Communist Party’s rising military adventurism, which is why Taiwan has been bolstering its defenses. As US Senator Tom Cotton rightly pointed out in the same hearing, “[although] Taiwan’s defense spending is still inadequate ... [it] has been trending upwards
Small and medium enterprises make up the backbone of Taiwan’s economy, yet large corporations such as Taiwan Semiconductor Manufacturing Co (TSMC) play a crucial role in shaping its industrial structure, economic development and global standing. The company reported a record net profit of NT$374.68 billion (US$11.41 billion) for the fourth quarter last year, a 57 percent year-on-year increase, with revenue reaching NT$868.46 billion, a 39 percent increase. Taiwan’s GDP last year was about NT$24.62 trillion, according to the Directorate-General of Budget, Accounting and Statistics, meaning TSMC’s quarterly revenue alone accounted for about 3.5 percent of Taiwan’s GDP last year, with the company’s
There is nothing the Chinese Nationalist Party (KMT) could do to stop the tsunami-like mass recall campaign. KMT Chairman Eric Chu (朱立倫) reportedly said the party does not exclude the option of conditionally proposing a no-confidence vote against the premier, which the party later denied. Did an “actuary” like Chu finally come around to thinking it should get tough with the ruling party? The KMT says the Democratic Progressive Party (DPP) is leading a minority government with only a 40 percent share of the vote. It has said that the DPP is out of touch with the electorate, has proposed a bloated
RSS