Lagging government support, energy costs and lithium rout blamed as Kemerton closure sets back value-add dream

Distorted minerals markets, high energy prices and delays to tax credits intended to prop up buckling critical minerals miners have all been blamed for Albemarle’s decision to abandon lithium refining in WA. Federal Resources Minister Madeline King — who has pushed for Australia to embrace value-adding on its minerals — said a decision to shutter the last lithium hydroxide processing train at Kemerton was “a blow for workers” and “disappointing news for communities in the South West”. Albemarle’s decision on Thursday to put the refinery on care and maintenance will result in 250 local workers being made redundant, and comes despite a rebound in prices for the battery mineral found in abundance in Australia. “The difficult decision taken by Albemarle reflects a simple reality that it can be an immense challenge for projects to compete in global supply chains that are concentrated, opaque and subject to market distortion,” Ms King said. “It is for this reason that the Australian Government — alongside partners such as the US, UK, EU, Japan, Korea, Canada and others — is actively working together to help build out alternate global critical minerals supply chains.” Ms King was recently in Washington to hold discussions with other allied countries about tackling China’s critical minerals dominance. Australian Manufacturing Workers Union State Secretary Steve McCartney said there was a “wave of disappointment” down at the site, and that the Federal Government should have taken intervention earlier. “There’s a fund there that’s supposed to support this and it’s been left alone,” he told The West Australian, referring to the Federal Government’s production tax credits. “The Federal Government looks too far into the future.” The credits, lobbied for by Australian mining companies, gives eligible companies a refundable tax offset of 10 per cent of the eligible costs of processing critical minerals, such as spodumene concentrate into lithium hydroxide. However, they are not due to kick in until July 2027. It’s understood Albemarle would likely have been a recipient. High energy prices in WA are also believed to have piled extra financial pressure on the US chemicals giant’s Kemerton operations near Bunbury in the South West. Shadow energy minister Steve Thomas said the cost of energy for WA businesses had increased dramatically in recent years. “It’s widely known that Albemarle had been seeking a cost-effective and reliable energy solution for its lithium refining operations,” he said. Albemarle is not the only mining company with energy-intensive refining operations to have raised the issue. WA miner Lynas Rare Earths went public at the end of last year with its gripes about unsustainable outages at its Kalgoorlie refinery. WA Housing Minister John Carey said the State Government was “committed to supporting” the industry and acknowledged the market fluctuations were adding to the strain. “Our job at the moment is for the workers at hand and making sure that we can provide the necessary support,” he said.