Western Australia’s Lithium Miners Offered A Helping Hand

WA’s lithium industry currently supplies around 50 per cent of the world’s needs, and the Cook Government would like to keep things that way.

Lithium is used in all sorts of energy storage applications; everything from cordless tools to home batteries and electric vehicles. Back in early 2023, Australian miners were making a motza from lithium, with spodumene¹ prices as high as around USD $6,000 a tonne.

The average spot price for Australian spodumene concentrate as at yesterday was just USD $845 a tonne.

Australia’s lithium spodumene export earnings fell 69% year-on-year in the September quarter 2024 to $1.2 billion according to Australian Government’s latest Resources and Energy Quarterly (December 2024) – even though export volumes rose 23% over the period. In dollar terms, 86% of spodumene exported from Australia in the September 2024 quarter was sent to China.

The plummeting price of lithium has already claimed a few local scalps. For example, Mineral Resources announced in November 2024 it was placing its Bald Hill lithium mine in Western Australia  into care and maintenance this month due to the decline; with the loss of 300 jobs. In September, Arcadium Lithium, one of the world’s largest producers, announced plans to mothball its Mt. Cattlin spodumene operation (pictured above) in 2025.

The lithium industry is a significant employer in Western Australia, supporting more than 11,000 jobs in the last financial year.

Loans For WA Lithium Miners

In November, the Cook Government announced a Lithium Industry Loan Facility; applications for which opened last week. The initiative seeks to provide temporary financial assistance to support ongoing operations of miners.

“The Lithium Industry Loan Facility will help our lithium miners pull through this challenging period, and come out even stronger into the future,” said WA Premier Roger Cook. “Our clean energy plan is positioning WA as a global renewable energy powerhouse, and our critical minerals industry will play a key role in WA’s economic future.”

The total maximum allowable loan is $15 million per successful applicant. There will be an interest-free period, which will end when average spodumene prices exceed US$1,100 per tonne for 2 successive quarters, or by 30 June 2026; whichever happens first. Companies will need to repay the loans through regular quarterly payments over the 2 years following the end of the interest-free period.

Among the eligibility criteria, applicants must be actively operating a lithium mine located in Western Australia at commercial scale; with no plans to enter or be currently under care and maintenance.

The facility is a component of the $150 million lithium support package announced by the Cook Government last month.

Lithium Price Outlook

The December 2024 Resources and Energy Quarterly says the benchmark China lithium spodumene price is forecast to pick up to US$1,000 a tonne over 2025, and further recover to US$1,125 a tonne by 2026. But the report notes weaker than anticipated EV sales growth remains a risk for lithium prices.

If the last few years are anything to go by, expect the unexpected; but prices aren’t expected to return to the highs of 2022 and 2023 for the foreseeable future.

Australia’s lithium export earnings are expected to fall from $9.9 billion in 2023–24 to $6.5 billion 2025–26; revised down from $8.2 billion.