Lithium Giant Shutters WA Plant, Cutting Hundreds of Jobs

Albemarle, a prominent US lithium producer, has decided to shut down its Kemerton lithium hydroxide processing plant in Western Australia. This closure is expected to affect approximately 250 employees at the facility.

Details of the Shutdown

The Kemerton plant, situated near Bunbury, has been a significant source of lithium hydroxide, produced from spodumene sourced from the nearby Greenbushes mine. Recently, Albemarle announced it would place the last operating train of the plant into care and maintenance effective immediately.

Statement from Company Leadership

Kent Masters, Albemarle’s chairman and CEO, described the decision as challenging. He stated, “This follows significant actions we have taken over the past two and a half years to reduce operating costs during an extended period of price volatility in the market.”

Masters noted that despite recent improvements in lithium prices, they were insufficient to offset the current challenges facing Western Australia’s hard-rock lithium conversion operations. This strategic move aims to enhance financial flexibility amid ongoing market fluctuations.

Market Context

The lithium hydroxide market has seen a rise in demand due to energy storage needs. However, Albemarle recognizes the necessity of continuing to cut costs and improve productivity for long-term sustainability.

This decision to close the facility follows previous actions, including the idling of production on Train 2 in July 2024, which led to a loss of around 300 jobs. At that time, Albemarle also planned to halt construction on Train 3 to focus efforts on completing Train 1.

Production Capacity

• Each train at the Kemerton plant had the capacity to produce approximately 25,000 tonnes of lithium hydroxide per year.

Reactions to the Closure

Industry representatives expressed concern about the implications of this shutdown on the local economy. Aaron Morey, CEO of the Chamber of Minerals and Energy WA, indicated that the decision reflects the competitive nature of global lithium markets.

WA opposition energy spokesperson Dr. Steve Thomas stated that the closure was not surprising given the industry’s struggles with low lithium prices, which have plummeted since 2022 due to market oversupply.

Future Considerations

As for the future of the Kemerton facility, Thomas expressed hope for market corrections that would enable lithium hydroxide production to resume. Meanwhile, WA Housing and Works Minister John Carey expressed disappointment, emphasizing the need to evaluate the situation thoroughly.

Support for affected workers is currently a priority, with resources available through local Skilled Trade Centres.

Strategic Importance of Lithium Assets

Even with the closure of the Kemerton plant, Albemarle’s interests in Australia remain significant. The company holds a 49% share in the Talison joint venture, which operates the Greenbushes mine, the largest hard-rock lithium mine in the world.

Albemarle’s exploration and mining interests in Western Australia remain unaffected by this recent development, highlighting their importance to the company’s overall strategy.