WestStar wins $8m contract for Chinese-backed WA lithium plant; shares spike 92pc
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WestStar Industrial has emerged from a trading halt this morning to reveal its engineering business has won an $8m contract for Tianqi’s lithium plant in Western Australia.
As flagged by Stockhead yesterday, it is the largest contract awarded to WestStar (ASX:WSI) subsidiary SIMPEC.
Shares spiked over 92 per cent to an intra-day high of 2.5c on Tuesday morning. Nearly 34 million shares had changed hands before midday AEDT.
The contract was awarded by MSP Engineering, which SIMPEC worked with previously on Talison Lithium’s Greenbushes lithium mine in the south-west of WA.
MSP is the head contractor for the design and construction of the lithium plant in Kwinana, south of Perth.
Chinese-backed Tianqi Lithium is spending more than $700m on building the two-stage lithium processing plant.
The plant will process spodumene ore from the Greenbushes mine — the world’s largest hard rock lithium mine – into lithium hydroxide monohydrate.
Spodumene is the main lithium bearing mineral mined from hard rock lithium mines.
Lithium hydroxide is becoming more popular among electric car battery makers because it can produce cathode material more efficiently.
Tianqi’s processing plant will have a total output of 48,000 tonnes per annum once completed.
“The group order book is now at $25m only halfway through the year, with much of this total falling within FY19, against full year revenue of $9m for WestStar last year,” director Bert Mondello said.
WestStar said that SIMPEC had tendered for more than $150m worth of work over the past year and after a long lead time, many of these projects are now being awarded.