Monsters of Rock: Choo-choo, the lithium train is coming
Everyone is batty for lithium right now, the globe-saving commodity pulling globe-trotting Aussies to every corner of the world to dig it up.
Will it really save the world from the scorching hellfire of climate change? Who knows, but it’s a powerful marketing tool that has made the metal the most investable thesis since iron ore and China in the early 2000s.
We need more of it and at lower levels of carbon emissions.
The world’s biggest lithium mine, the Greenbushes operation in the South West of WA, is looking to do that by supporting a major production ramp up by reopening a railway line that’s been closed over over two decades.
It comes with the Talison Lithium project looking to increase its production capacity from around 1.5Mtpa of spodumene deliveries a year to more than 2.1Mt.
Owned 51% by a 51-49 JV between China’s Tianqi and ASX listed IGO (ASX:IGO) and 49% by US giant Albemarle, it would make the mine more than double the size of its nearest hard rock rivals.
A $6.6 million feasibility assessment will be completed on the reopening of the line, jointly funded by the WA Government and Talison, which would deliver a rail solution to take the concentrate from the Greenbushes mine to Bunbury.
That is around where Talison part-owner Albemarle is building two additional trains to add on to its Kemerton refinery, which will eventually have a capacity of 100,000tpa of lithium hydroxide.
Tianqi and IGO’s Tianqi Lithium Energy Australia JV is currently mulling the addition of a second 24,000tpa train at their refinery site in Kwinana.
Currently around 135 truck movements happen every day taking concentrate from Greenbushes to Bunbury.
Within five years that could be as much as 70,000 a year, with the State Government saying moving the material on a recommissioned train line could remove around 200 truck movements a day from the South Western Highway.
Building off a high level study completed in 2020, the recommissioning study will be done by the second half of 2024, looking at how much it would cost to reinstate the track, level crossings and build new terminal facilities at Greenbushes and Bunbury.
Talison CEO Lorry Mignacca suggest decarbonisation planning will play a role in the decision. Any work would eventually back a join funding proposition from Talison, rail owner Arc Infrastructure and the State.
“Talison Lithium is proud to be leading this work and looks forward to close engagement with its rail industry partners, Government, and most importantly the communities along the railway line.
“We are committed to undertaking this study and are hopeful the results of the study will lead to decisions late next year to recommission the Greenbushes to Bunbury railway line which would take our product off the roads and assist with all our decarbonisation efforts.”
State Transport Minister said work was required to understand the impacts of the proposal, given carriages have not run on the line for well over 15 years.
“The global demand for lithium continues to grow at a rapid pace, and that means we will continue to see production increase at mines like here in Greenbushes,” she said.
“In the next five years, we’re expecting the number of truck movements to and from the Greenbushes Lithium Operation to increase to around 200 every day, which will further increase congestion on the road network.
“Whilst there are significant positives such as reducing congestion, cutting emissions and improving road safety, we need to understand in detail what would be required to recommission the train line and the associated costs.”
Decarbonisation efforts are important for miners with big commitments to investors about their ESG credentials, but also for those wanting to supply western automakers, who could pay more or display a preference in future for lithium which clears the hurdles for so-called ‘green premiums’.
Elsewhere work to build out a larger global network of lithium supply is continuing.
Over in Africa, Leo Lithium (ASX:LLL) took another major step to delivering Africa’s first spodumene mine.
It has inked a $520 million deal that will see West African focused mining contractor Corica Mali operate the open pit mining services at the Goulamina mine.
Corica, which has more than 2000 staff at seven mines in Mali, Cote d’Ivoire and Burkina Faso, will move between 18-20Mt of rock every year over the five year term of the mining contract.
The JV between ASX-listed Leo and China’s Ganfeng is expected to produce around 500,000tpa of spodumene con a year, ramping up to 1Mtpa in a future second stage which could include the development of a downstream processing facility, likely to be located in Europe.
Corica are already onsite at Goulamina, undertaking a pre-strip and DSO mining and crushing for early DSO sales to begin later this year. The mine’s concentrate plant is expected to be commissioned by the middle of next year.
Back home SQM-backed Azure Minerals (ASX:AZS) is continuing to grow the Andover lithium discovery it co-owns in a 60-40 JV with super-prospector Mark Creasy.
Recent drilling results returned hits of 101.3m at 1.21% li2O including a higher grade zone of 64.1m at 1.63% Li2O in hole ANDD0223 and 100.2m at 1.25% Li2) in ANDD0221 including a high grade zone of 1.86% Li2O.
Designed to twin a hole which stalled due to drilling issues into the AP0011 pegmatite results from ANDD0223 and others recently assayed have extended mineralised zones at Andover to a strike of more than 1200m and vertical depths of more than 350m.
AZS moved higher earlier today before closing even. The $630 million market capped explorer is up an incredible 638% YTD.
At Stockhead, we tell it like it is. While Azure Minerals is a Stockhead advertiser, it did not sponsor this article.