WA Lithium Refinery Closure to Eliminate Hundreds of Jobs

The recent closure of Albemarle’s lithium refinery in Kemerton, Western Australia, is set to eliminate approximately 275 jobs. This decision follows the company’s announcement that the operating costs had become untenable amid rising lithium prices and extended price volatility.

Impact of the Closure on Jobs

Albemarle’s chairman and CEO, Kent Masters, described the suspension of operations at the Kemerton facility as a difficult choice. The company has been actively attempting to reduce its operating costs for the past two and a half years. However, the challenges posed by the fluctuating market made maintaining operations unfeasible.

Kemerton Refinery Details

• Location: 160 kilometers south of Perth, Western Australia
• Opened: 2022
• Processes: Spodumene from the Greenbushes lithium mine
• Initial Capacity: Designed to produce approximately 100,000 tonnes of lithium hydroxide annually

The Kemerton refinery represented a significant investment aimed at bolstering the battery materials industry in Western Australia. However, following a decision in 2024 to halt the construction of additional processing lines, the immediate closure of Train 1 reflects deep concerns about the profitability of lithium refining in the region.

Factors Contributing to the Shutdown

Analysts have pointed out that high energy costs in Australia have rendered local processing projects less competitive compared to those in countries like China, which benefit from lower energy prices. Mining commentator Tim Treadgold expressed that the high-cost energy system in Australia has become a critical hurdle for the mining sector.

Broader Implications for the Lithium Industry

Many view this shutdown as an indicator of the potential struggles facing the lithium-refining sector in Western Australia. The viability of lithium projects has been increasingly challenged, primarily due to falling market prices and reduced demand for electric vehicles since 2022.

Reactions to the Closure

WA Shadow Minister for Energy, Steve Thomas, expressed his concern regarding the impact on workers and the local community. He acknowledged that while the closure was anticipated, it would still deeply affect those employed at the refinery and their families.

Looking ahead, Thomas expressed hope for a resurgence in the lithium market. He pointed out that stable energy prices are crucial for the future of lithium hydroxide production at Kemerton. Until conditions improve, the industry faces significant challenges.