Albemarle’s Kent Masters warns high costs ‘have to be addressed’ as Roger Cook urges Uncle Sam to step up

Albemarle chief Kent Masters says the US chemicals producer would need Western buyers to start paying a premium for its lithium hydroxide to consider restarting the Kemerton refinery it suddenly idled blaming high costs in WA. Mr Masters told analysts on Thursday competing refineries in China were producing the battery-making input for about $US4 to $US5 cheaper per kilo, and the cost gap was “going to have to be addressed” in order to build out new supply chains. “We need differentiating prices to cover those costs from the West and we’ve not been able to get that support so far,” he said when asked what price lithium needed to get to consider restarting the idled processing operation. “Really the thing we’re looking for is probably a bifurcation, where Western prices are different than prices in China. That’s really what we’re looking for and to see that sustainable over time to cover those costs.” The closure will come at a cost of about $US100 million to Albemarle, which booked a net loss of $US414m for the December quarter. Earning before interest depreciation and amortisation for its energy storage segment, which includes sales of lithium hydroxide, were down 8 per cent on the prior year to $US697 million due to lower lithium market pricing. The closure of processing train 1 at Kemerton will result in 250 redundancies for local workers, a result WA Premier Roger Cook and Resources Minister Madeleine King have both labelled as disappointing. Mr Masters said Albemarle had “made progress” in securing Government support from the Federal and WA Governments to keep costs down but that there was “still a gap there” between the State and China. Incentives such as the lithium industry support program and production tax credits — due to start in 2027 — have both been offered as free kicks to help lithium producers struggling under a years-long glut. High costs associated with tailings disposal, labour and energy were specifically called out by the CEO. WA Premier Roger Cook defended his Government’s support for the industry following the Kemerton closure on Thursday, while also calling on other allied countries to roll up their sleeves. “It’s important that our trading partners also step up and support mineral processing capacity in places like WA so the minerals we mine can be sold through new supply chains,” he said. Federal Resources Minister Madeleine King was in Washington last week holding talks with US and other allied counterparts to address ways to counter China’s dominance in critical minerals.