Legal wrangle may delay Greenbushes lithium project

A dispute over conflicting mineral rights could delay progress at Greenbushes, Australia's largest lithium mining project, operated by mining group Talison Lithium.

Australia-based Talison is a joint venture between lithium processors Tianqi Lithium in China and US-based Albemarle.

US-based tantalum producer Global Advanced Metals (GAM) has secured a series of court hearings in October to consider its claims that Talison's mine expansion plan threatens to block access to the deposit's tantalum resources, over which GAM has mineral rights.

A trial in Western Australia's Supreme Court, set for 16-31 October, will decide whether Talison Lithium should be issued with an injunction to prevent its mine plan encroaching on GAM's mineral rights. GAM has lodged a planning application for its own mining operation to produce tantalum at Greenbushes.

Talison has not commented so far on how the legal dispute or GAM's proposals could affect the plans and schedule for its own expansion, which targets doubling lithium production to 2.3mn t/yr by 2021.

"The expansion of Talison's lithium production cannot be at the expense of GAM's rights to its tantalum and all other minerals at Greenbushes," GAM chief executive Andrew O'Donovan said.

The tantalum and lithium companies evolved from Talison, formerly Sons of Gwalia, which owned the Wodgina and Greenbushes mines in Western Australia. The area was historically the world's largest hard rock lithium and tantalite producer. The company spun out into separate tantalum and lithium businesses, and tantalite from artisanally mined alluvial deposits in the Democratic Republic of Congo undercut Australian tantalite mines in the past decade.

Talison's tantalum business transformed into GAM through its 2011 acquisition of US tantalum processor Cabot and focused on advanced tantalum markets. The company idled and ultimately spun off its mine assets but retained rights to the tantalum, including as a by-product of lithium mining. Talison Lithium targeted the growing lithium battery feedstock market and was acquired by the consortium of downstream processors Tianqi and Albemarle.

Rising demand for tantalum capacitors for next-generation electronics and tighter regulations on ethical sourcing have lifted prices for tantalum feedstock above the $100/lb level at which Australian production is economically viable. Prices for 30pc grade tantalite ore were last assessed at $104-109/lb Ta2O5 on 5 July.

GAM only uses its processing facility at Greenbushes to process tantalum recovered as a by-product of lithium mining into feedstock that is shipped to its plants in the US and Japan.

But GAM told Argus it is looking into several options for lithium sourcing in Australia, subject to the outcome of the court case, including its own mine operations independently of Talison. It submitted a plan earlier this year to develop its own tantalum mine at Greenbushes, which could once again become the world's largest producer. Separately last year it signed an agreement with another Australian lithium miner, Pilbara Minerals, for 100,000lb of low-grade tantalite concentrate as by-product of Pilbara's Pilgangoora lithium mine. This production is not expected to come on line until the end of 2019 at the earliest.