Wesfarmers Ltd (ASX:WES) is strengthening its lithium ambitions with a $1.45 billion expansion of the Mt Holland operation in Western Australia, aiming to double spodumene concentrate production despite weak prices.
The project, jointly owned with SQM (NYSE:SQM) through Covalent Lithium, will lift production from 380,000 tonnes to 760,000 tonnes. Construction of a second concentrator and ore-sorting facility is expected to begin in the second half of 2027, with first production targeted for 2030.
Expansion supports downstream growth
The investment follows about $2.6 billion already committed to Mt Holland and the associated Kwinana lithium hydroxide refinery south of Perth.
The expanded mine is expected to provide additional feed for a future increase in refinery capacity, while retaining flexibility to supply overseas customers.
Chief executive Rob Scott said the project should deliver attractive returns and improve resilience through commodity cycles.
Long-term lithium outlook
SQM chief executive Ricardo Ramos said lithium demand fundamentals remained strong, supported by the global energy transition.
“We continue to see robust growth in demand for high -quality spodumene concentrate driven by the global energy transition, and Mt Holland is ideally positioned to meet that demand at competitive costs,” he said.
“Doubling our production capacity will further strengthen our position on the global cost curve.”
Mt Holland is operating at full capacity, with the expansion expected to strengthen Covalent’s global cost position.