Australia's IGO and its lithium joint venture partner Tianqi Lithium produced first lithium hydroxide at their Kwinana refinery in Western Australia.
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The first lithium hydroxide chemical production is a big step for Australia's battery supply chain, as Kwinana is the country's first lithium hydroxide facility.
IGO said Aug. 23 that, with first lithium hydroxide chemical produced, the JV would be turning its focus to operating the first production train, Train 1, on a continuous, rather than batch basis.
It will also look to progressively improving product quality to a battery grade product for qualification by its offtake customers.
IGO, which acquired a 49% stake in the JV in December 2020, said that it expected saleable hydroxide product to be produced in the fourth quarter of 2021, followed by battery grade product for accreditation by customers in the first quarter of 2022.
"Train 1 is expected to then progressively ramp up to the design production rate of 24,000 mt/year lithium hydroxide by the end of 2022," it said.
In the months leading up to the first hydroxide production, the JV had been progressing the commissioning of Train 1 at pace, with IGO saying that the commissioning program was designed to hot commission each of the individual unit processes sequentially from calcining, acid roasting, leaching, purification and crystallization on a batch basis, culminating in the first production.
IGO said previously in a July earnings call that the construction of the A$400 million ($287 million) plant was approved in 2016 and was ready for commissioning in 2019, but the process was paused due to poor market conditions.
However, lithium prices have recovered notably since then, with S&P Global Platts seaborne lithium hydroxide assessment at $18,000/mt CIF North Asia Aug. 23, exactly double the $9,000/mt level seen at the start of 2021 and 52.5% higher than August 2019.
Key milestone for JV
IGO managing director and CEO Peter Bradford said the first production was "the first step of a journey, but nevertheless represents a key milestone for the Lithium JV."
He said the commissioning of Train 1 had taken place ahead of the internal schedule developed earlier in 2021.
"The strong demand being witnessed in the lithium market globally reinforces the strategic nature of Kwinana which, together with the Lithium JV's interest in the Greenbushes mine, is rapidly evolving into a globally significant, integrated lithium operation catering to the specific needs of premium lithium-ion battery manufacturers."
IGO said in December that the JV planned to commission Kwinana's second production train in 2024, which will increase production to about 48,000 mt/year of battery-grade lithium hydroxide to be exported from the Port of Fremantle.
IGO also acquired a 25% indirect interest in the Greenbushes mine, the world's largest, highest-grade lithium mine, in December through the Lithium JV with Tianqi, which is planned to feed Kwinana.
RBC Capital Markets analysts said in a Aug. 23 note that its base case scenario expected Kwinana to produce saleable lithium hydroxide from Kwinana in Q1 2022, which would be priced at a discount to lithium hydroxide prices.
"Our concern lies with the Kwinana plant's design recovery rate, which we estimate to be around 75%. There aren't many operational lithium hydroxide projects to benchmark to, however, several scoping studies and desktop assessments put recovery rates in the range of 55%-80%," RBC analysts said.
They added that, while Greenbushes' high reserve and concentrate grade was a benefit, liberating lithium and/or producing hydroxide was a difficult process in general.