Australia Races to Save Lithium Mines With $150M Relief Package
Western Australia has unveiled a substantial $150 million support package aimed at stabilizing its lithium mining sector amid a significant downturn in global lithium prices. Western Australia Premier Roger Cook has announced the Lithium Industry Support Program, which offers a combination of fee waivers and interest-free loans to assist both emerging and established lithium producers. The program’s primary objective is to prevent mine closures and safeguard over 11,000 jobs linked to the sector.
Government charges on electricity, water, port fees, and mining tenements will be waived for up to 24 months as part of the package. This relief is designed to alleviate operational costs for companies during the market slump.
Also included in the package is a $50 million loan facility that will provide interest-free loans to struggling lithium miners, ensuring they can maintain production levels. These loans are structured to be repaid over two years, with repayments commencing after the interest-free period or when lithium spodumene prices recover to $1,100 per tonne.
The support package has been met with cautious optimism within the industry. Tony Ottaviano, CEO of Liontown Resources, acknowledged the government’s recognition of the sector’s challenges, stating, “The government has recognised the dire state of the lithium market and said the package seemed ‘well-balanced’.”
Similarly, Dale Henderson, CEO of Pilbara Minerals, described the assistance as “important” and noted it would help the industry “navigate this point of the market cycle” while supporting a “growth sector as it establishes itself.”
Cook emphasized the importance of the lithium sector to Western Australia’s economic diversification and decarbonization efforts, stating, “Our lithium industry is crucial to my Government’s plan to diversify the economy, to decarbonise the economy.”
Mines Minister David Michael addressed concerns about the timing of the assistance, asserting that the package is a “responsible decision” to support the industry through current challenges. He also clarified that the interest-free loans are structured to be repaid, ensuring fiscal responsibility.
The lithium industry has experienced rapid expansion in recent years, with Western Australia emerging as the world’s largest supplier of hard rock lithium, contributing approximately 50% of global supply. However, a sharp decline in lithium prices—from highs of $8,000 per tonne to below $800 per tonne—has led to operational challenges, including mine suspensions and job losses.
Notably, Mineral Resources recently placed its Bald Hill operation into care and maintenance, resulting in approximately 300 job losses. Liontown Resources has also scaled back expansion plans at its Kathleen Valley mine, and Pilbara Minerals halted work on its Pilgangoora operation.
Information for this briefing was found via The West Australian and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
