The Shadow Minister for Energy and local Member of Parliament Dr Steve Thomas said today the decision of Albemarle to stop the expansion of their Kemerton processing unit was not surprising given the volatility of the lithium market over the last year.
“It has been a tough time for lithium producers across the board, with the current price around a third of the money producers were getting a year ago” Dr Thomas said.
“Despite the strong long term prospects for lithium, the volatility that exists makes it difficult for companies to plan and budget in the short term.
“The result of that is the sorts of decisions we have seen recently from local processor Albemarle and local lithium miner Talison.
“The good news is that demand and price are expected to recover over the next couple of years, and the units that are being put into care and maintenance will be able to be restarted.”
Dr Thomas said that today’s announcement demonstrated the problems associated with the boom and bust cycle that dominates the Western Australian economy, largely thanks to its reliance on mining.
“We have been looking for a diversification of the WA economy in recent years because it has been far too dependent on the fortunes of iron ore” Dr Thomas said.
“A large part of that discussion on diversification has centred on critical minerals, especially lithium.
“What should now be obvious to everyone is that price volatility of other minerals is a significant economic risk factor just as it is for iron ore.
“Which means that the debate on diversification has to go beyond just picking the next boom mining commodity.
“As I have previously said, greater investment in Strategic Industrial Areas to promote processing is needed. While I welcome the $500 million set aside in the budget for this purpose, far greater detail is required.
“In particular, investment in the services and infrastructure at Kemerton Industrial Estate must be a high priority.
“Given today’s announcement I would have though this could now be considered urgent.”
