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| Kwinana lithium hydroxide refinery |
Challenges and Strategic Options for Kwinana Lithium Hydroxide Refinery
Australian lithium producer IGO is negotiating with Chinese partner Tianqi Lithium regarding the future of their Kwinana lithium hydroxide refinery in Western Australia. The refinery reported a significant A$955 million loss during the July 2024–June 2025 financial year. IGO stated that the project struggles to achieve sustainable returns, prompting discussions on various strategic options. Meanwhile, the Kwinana plant operated below its 24,000 t/yr nameplate capacity due to equipment failures in the last quarter.
Tianqi Lithium Energy Australia (TLEA) holds a 51% stake in the Kwinana refinery joint venture, while IGO owns 49%. Despite the setbacks, TLEA plans to increase lithium hydroxide output to 9,000–11,000 tons in 2025–26, up from 6,782 tons in 2024–25. The joint venture halted work on a planned refinery expansion earlier in 2025 but intends to ramp up current production. IGO fully impaired its stake in the refinery's only operating plant as of July 31, reflecting the project's financial difficulties.
In parallel, TLEA is advancing the expansion of the Greenbushes lithium mine processing plant. The upgrade will raise spodumene capacity from 1.48 million tons to approximately 2 million tons per year. This enhancement supports increased raw material supply amid fluctuating lithium prices. Lithium concentrate prices dropped sharply in 2024–25, with spodumene cif China prices falling from $1,070/t in July 2024 to $607/t in June 2025, then recovering slightly to $910/t by late August. This volatility heavily influences refinery economics and industry investment decisions.
ScrapInsight Commentary
The Kwinana refinery’s losses underscore the challenges in lithium hydroxide processing amid volatile prices and operational issues. However, Greenbushes’ spodumene expansion offers a positive outlook for raw material supply. Industry players must balance operational efficiency with market fluctuations to sustain growth in the lithium sector.
