The Western Australian Government has announced today that it will provide temporary assistance to three lithium mineral producers in Western Australia.
Galaxy Resources’ Mt Cattlin operations, Pilbara Minerals’ Pilgangoora operations and Altura Mining’s Pilgangoora operations will receive a 50 per cent royalty rebate on spodumene concentrate for up to 12 months.
The rebate is only available where the companies have an operating spodumene concentrate project and the employee count does not drop significantly from current numbers.
It will not be provided, and royalties will be required to be paid in full, if the average price of spodumene concentrate is equal to or greater than US$550 per tonne for a given quarter.
At the conclusion of the assistance period, the rebates will be fully repaid over a period of two years, meaning there will be no cost to the State Government.
Spodumene concentrate is the mineral source from which lithium is derived.
Western Australian Mines and Petroleum Minister, Bill Johnston, said that over the past two years the fall in the price of spodumene concentrate has put these companies’ operations at risk and their finances under pressure, which is why the State Government is offering assistance.
“The McGowan Government’s support is consistent with our Future Battery Industry Strategy and our goal to increase battery minerals production and reduce project costs across WA,” he said.
“Supporting these producers could prevent the loss of more than 600 jobs and save more than $20 million in annual royalty revenue over the coming years.”
“Experts predict prices for spodumene concentrate will rise due to the growing demand for lithium used to manufacture electric vehicles and energy storage systems,” the Minister added.
The Association of Mining and Exploration Companies (AMEC) and the Chamber of Minerals and Energy of Western Australia (CME) welcomed the announcement by the State Government.
In August, CME and AMEC released a report titled A case for building resilience into Western Australia’s lithium industry, which outlined what was needed to ensure the immediate viability, growth and longer-term sustainability of WA’s burgeoning lithium industry. The report identified that ongoing government support would be vital for the sector to remain sustainable in order to take advantage of growing global demand, and to preserve WA’s leading position in the international market.
A key recommendation was for temporary cost relief for lithium spodumene producers during this unexpected and temporary low-price period.