AMEC’s Overtures Result in WA Government Lithium Sector Review

IN THE LOBBY: The Western Australian lithium sector received a recent boost in the form of a supportive announcement from the State government.

The WA government announced lithium royalty amendments to encourage downstream processing, a raft of changes it said would provide much needed support to the state’s battery materials sector.

WA Mines and Petroleum Minister Bill Johnston announced a regulatory review would be undertaken that would include a high level of input from industry players, indicating that the McGowan Government will introduce a new royalty arrangement for lithium producers that will encourage downstream processing and manufacturing.

“The McGowan Government is committed to supporting Western Australia’s battery materials industry,” Johnston said.

“Updating the royalty arrangements provides a fairer system for all lithium producers and will enable Western Australia to move up the battery value chain beyond mining and processing.

“This will create more jobs and encourage innovation in meeting the needs of the growing demand for electric vehicles and battery storage systems.

“Western Australia is increasingly becoming an internationally attractive destination for downstream processing and manufacturing of lithium and other battery minerals.”

The Department declared that a five per cent feedstock royalty rate for lithium hydroxide and lithium carbonate, where those are the first products sold and the feedstock is spodumene concentrate, will be introduced as soon as practicable.

The government believes this new royalty arrangement clears up any uncertainty regarding lithium royalties, compared to the previous regulations.

The new lithium feedstock royalty rate, introduced via amendment to Mining Regulations 1981, is hoped to ensure all lithium producers are treated equally, in turn encouraging further downstream processing of lithium in Western Australia.

The Association of Mining and Exploration Companies (AMEC) was one of the first to react to the announcement and it was not surprising that it was in a positive vien.

AMEC said it was a good result for the sector and was a response it was hoping to see from its suggestion to the government to introduce appropriate incentives to encourage development throughout the supply chain in the body’s Lithium Industry in Australia Report published with Future Smart Strategies in January 2018.

“Today’s royalty rate announcement helps Western Australia compete internationally to lock its place in the global lithium value chain,” AMEC CEO Warren Pearce said.

“Defining the royalty provides certainty for companies investing in Western Australia and will support the financing of projects and further investment.

“Western Australia has a phenomenal geological opportunity, particularly in battery minerals, but needs to make sure the regulatory settings are right so companies will choose to invest here.

“Today’s announcement increases certainty and Western Australia’s investment attractiveness for lithium downstream processing.”