“It has been a challenging project and we are all very excited about the upcoming milestones,” the spokesperson at the Chinese lithium producer said.

Construction work has stalled at the facility on a number of occasions due to Tianqi's financial troubles and tight liquidity. Tianqi said in April last year it was exploring asset or equity sales, or the possibility of bringing in new domestic or foreign investors to ease the financial pressure of growing debt.

At the end of 2020, IGO announced that it had entered into a binding agreement to acquire a 49% indirect interest in the Kwinana lithium hydroxide plant (with the remaining 51% owned by Tianqi) and a 24.99% indirect interest in the Greenbushes Lithium Mining and Processing Operation. Both assets are in Western Australia. The two companies expect to finalize the transaction in the second quarter of 2021, pending regulatory approval.

The Kwinana plant will have an output capacity of 48,000 tonnes per year of battery grade lithium hydroxide upon completion, to be achieved in two stages each of 24,000 tpy.

Tianqi had originally planned for the the first phase to production in the fourth quarter of 2022. No new timeline has been shared for the plant's productions schedule.

Australia is a key exporter of spodumene, the raw material that is processed to produce lithium salts. Most of the processing capacity is currently in China, where the majority of spodumene is exported.

The Kwinana lithium processing plant will allow part of the spodumene extracted in Australia to be processed into lithium salts locally, moving some lithium production away from China.

Lithium is a key ingredient in batteries used to power electric vehicles (EVs) and demand for lithium is expected to grow exponentially in the medium term due to increased demand for EVs globally.

Fastmarkets’ latest assessment of the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price, cif China, Japan & Korea was $12.50-13.50 per kg on May 6, unchanged over the past fortnight but down from $11.50-13.00 per kg on April 22.