By Hamish Hastie and Jesinta Burton
The WA government has announced a two-year-long $150 million support package for the state’s embattled lithium industry to help it remain globally competitive as it grapples with a price slump for the commodity.
On Wednesday, Premier Roger Cook announced the state government would establish a $50 million loan facility to help miners sustain their operations until the average price of lithium spodumene exceeds US$1100 per tonne for two successive quarters or by June 2026.
WA Premier Roger Cook.Credit: Ross Swanborough
Prices are currently hovering around US$800 per tonne, almost two years after having exceeded US$8000.
Under the plan, state government agencies will also waive fees for up to two years to support downstream processing of lithium, as well as port charges and mining tenement fees worth up to $9.37 million for miners during the ramp up phase of their operations.
Cook said the industry was critical to the government’s economic diversification and decarbonisation plans and that the leg-up would aid producers until lithium prices recovered to “sustainable levels”.
Mining Minister David Michael said the lifeline would support companies that had the capacity to be significant global players in the lithium industry and safeguard thousands of WA jobs.
“As we move to achieve a goal of net zero by 2050, our lithium miners will play such an important part in that,” he said.
“We know, though, that they are currently experiencing challenging conditions with world pricing, but they will have that critical role to play into the future. It’s important they are given every chance to remain globally competitive during this challenging period.”
While all lithium miners would be eligible to apply for a loan under the plan, Michael confirmed the handout would likely benefit Gina Rinehart-backed Liontown Resources and Covalent Lithium, both of which have projects currently in ramp up mode.
Cook flatly rejected assertions the government was “bailing out mining companies”, insisting the interest-free loan arrangement was temporary and that the regulator would ensure companies had the capacity to repay the funds.
The press conference was interrupted by a climate activist who was dragged away by protective services officers after he questioned Cook about the pending North West Shelf approval.
“I’ve got a question for that Premier. Is Western Australia about to get ripped off by us signing the North West Shelf deal,” the protestor yelled before the premier’s security staff and parliament police officers removed him from the area.
The state’s lithium industry has rapidly expanded in recent years, now supplying almost half of the world’s lithium.
But the burgeoning industry has been grappling with a sharp plunge in prices for the battery ingredient for the past year, prompting the state’s peak mining groups to lobby the state and federal governments for assistance.
The industry employed more than 11,000 West Australians 2023/24 financial year, generated $8.4 billion in sales and delivered a royalties windfall of $710 million to the state’s coffers.
The announcement comes just a fortnight after mining giant Mineral Resources confirmed it would mothball its Bald Hill mine in the Goldfields until the market improved, with more than 300 employees redeployed or stood down.
It also comes just months after US miner Albermarle was forced to slash its production by half and halt the expansion of its lithium hydroxide plant in the South West and lost more than US$1 billion in the last quarter.
Liberal leader Libby Mettam said the support package should have come should have come 12 months ago when the industry asked for it.
“Already, Western Australia has lost nearly 1,000 jobs in the lithium sector while the Cook Labor Government has dragged its feet,” he said.
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