The Western Australian Government has announced a support package for the state’s lithium sector amid softened prices.
The new $150 million Lithium Industry Support Fund will take a few different approaches to offer up support and will target both miners in the ramp-up phase as well as bolster downstream production.
Lithium miners in the ramp-up phase of their project will see port charges and mining tenement fees waived to the value of $9.37 million.
Government trading enterprises including DevelopmentWA, Synergy and Water Corporation will temporarily waive government fees to support the continuation of downstream processing of lithium to a total value of $90 million.
A $50 million loan facility will also be available to help lithium miners access temporary interest-free loans to help sustain their operations, based on demonstrating their current financial position and operational plan.
The support fund will remain on offer for the next two years, at which time lithium prices are expected to return to an economically sustainable level.
“This package will provide important temporary and responsible support for WA’s fledgling lithium industry, taking into account the extremely challenging market conditions it is facing,” WA Premier Roger Cook said.
“This package is aimed at helping our critical lithium industry and its workforce to the other side of this turbulent period – supporting local jobs and doing what’s right for WA.”
Federal Minister for Resources and Northern Australia Madeleine King has welcomed the package, which she said comes as the Federal Government looks to provide up to $17 billion in production tax incentives for the critical minerals and rare earths industry.
“The lithium industry plays an increasingly important role in the economy of Western Australia and in the global effort to fight climate change,” King said.
“It is vital we continue to support this industry so that we step up to our global responsibility to secure supply chains for critical minerals and rare earths globally.”
Miners likely to benefit include Liontown Resources, who recently tempered production at its Kathleen Valley mine, and Pilbara Minerals, which has reduced output at its flagship Pilgangoora mine.
Liontown managing director Tony Ottaviano praised the package at the company’s shareholder meeting yesterday, according to the Australian Financial Review.
“Every little bit helps. We’re not going to apologise for making sure that we’re in the most robust position through this cycle,” Ottaviano said.
“Whatever levers we need to pull, within reason, we will pull.”
The package has also drawn support from peak mining industry bodies, including the Association of Mining and Exploration Companies (AMEC).
AMEC chief executive officer Warren Pearce said the package ‘strikes the right balance’.
“This a clear and positive signal of support from the WA Government,” Pearce said.
“They have listened and acted accordingly, by backing our emerging industries.”
“This program will ensure lithium producers across the sector have the best fighting chance to counter the turbulent global headwinds.”
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