Australia could have its first lithium carbonate plant in WA within three years, with Talison Lithium to make a final investment decision on the multimillion-dollar project by the end of the year.
Having completed the latest expansion of its Greenbushes operation, 250km south of Perth, last week Talison said it hoped to use some of the additional output as high-grade feedstock for the proposed plant and was targeting first production in 2015.
If approved by the Talison board it would be the country's first move into downstream processing of lithium, used in electric car batteries, phones, computers and ceramics, into lithium carbonate. WA's other lithium producer, Galaxy Resources, already has a lithium carbonate plant but it is in China.
Although the lithium market is an opaque industry, sources say demand for lithium minerals has been growing at between 10 and 15 per cent a year since 2008.
Lithium can be processed into a number of different higher-value chemicals, including lithium carbonate, lithium bromide and lithium chloride.
Of global lithium production last year, about 26 per cent was used to make lithium-ion batteries, 29 per cent glass and ceramics and 14 per cent lubricant greases.
If Talison were to run Greenbushes at full capacity its production would be equivalent to the size of the global lithium market two years ago.
However, the company, which is listed on the Toronto Stock Exchange, has signalled it will bring on new capacity slowly to avoid depressing prices.