SQM boss spruiks aggressive lithium investment plan

SQM boss Ricardo Ramos is robustly confident lithium prices will lift by the end of the year, speaking at the official opening of the Mt Holland lithium mine.

The chief executive of the Chilean producer said although the lithium price was not a very good price today, it was moving in the right direction.

“I think at the end of this year, prices are going to be much better than today, that's what I expect,” Mr Ramos said at the mine site south of Southern Cross.

“I think next year is going to be better than this year.

“In the long term, we have a really positive view about the industry, the demand is growing so fast.”

SQM’s Chile operations have a 200,000 metric tonnes of lithium carbonate capacity, which Mr Ramos said he hoped to replicate in Australia and other countries through further opportunities.

The major producer is in the process of acquiring Andover project lithium hopeful Azure Minerals with joint venture partner Gina Rinehart’s Hancock Prospecting.

Mr Ramos spoke with confidence about the future of the lithium market, spruiking the potential for further investments in Australia.

He said he would love to have another 300,000 metric tonnes capacity outside of Chile, with the main focus being Australia.

“Someone will have to produce the last 500,000 metric tonnes and it's going to be more expensive than today," Mr Ramos said.

“No single doubt Mt Holland will be on the low part of the curve cost, and that’s why it's going to be a really profitable investment for Wesfarmers and SQM.

“We're more than happy with the investment. We want to invest more. We think it's a great project and I would love to have ten different Mt Holland's in Australia as we speak today.

“We expect to be very aggressive in investment in the future."

It comes after Wesfarmers said any interim sales of spodumene concentrate would not generate a profit due to higher cost of production while volumes ramp up at its Mt Holland concentrator.

Wesfarmers managing director Rob Scott said he expected the price to increase over time.

“We need to remember that the lithium market is still a developing market; it certainly hasn't surprised us to see some quite wild swings in pricing,” he said.

“If you go back twelve to twenty-four months, clearly the pricing was at unsustainably high levels, and when prices there are at very high levels, that can lead to producers coming into the market with much higher cost structures in an effort just to get product out there.

“So look, I think we're already seeing a supply response, we're already seeing some producers slow down with projects and cut back.”

The mining bosses' comments come against the backdrop of the freshly unveiled Mt Holland lithium mine and concentrator in Southern Cross.

Premier Roger Cook, Transport Minister Rita Saffioti and Mines and Petroleum Minister David Michael travelled to the site for the official opening ceremony. 

The $2.6 billion Mt Holland joint venture project encompasses the open pit mine, the concentrator and an under-construction refinery in Kwinana. It had an initial price tag of $1.9 billion in 2021, and is funded by both Wesfarmers and SQM. 

The operation is expected to produce 380,000 tonnes of spodumene concentrate per annum, and is on track to pump out 100,000 tonnes by mid-2024, Wesfarmers says. 

Mining commenced in February 2022 and the concentrator's construction was completed in the second half of last year.

The spodumene concentrate will be trucked down to Kwinana to be refined into battery-grade lithium hydroxide, with a production capacity of 50,000 tonnes per annum. 

The Kwinana refinery's construction is tipped for completion late 2024, with first lithium hydroxide expected in the first half of 2025. 

Wesfarmers is also toying with the idea of expanding the Mt Holland project to potentially capitalise of forecast market demand.  

The deposit has a resource of 186 million metric tonnes at 1.53 per cent Li2O (7.0 million metric tonnes of lithium carbonate equivalent) it has a reserve of 84 million metric tonnes at 1.57 per cent Li2O, according to Wesfarmers.