Tianqi postpones Aussie lithium plant plan

Tianqi Lithium Corp, one of the world's biggest lithium producers, says it has postponed commissioning of the first phase of its flagship Australian processing plant due to rising liquidity problems after the coronavirus outbreak.

The Chinese firm started production from what was slated to be the world's largest facility for lithium hydroxide, used in batteries for electric vehicles, in September 2019, with the ramp-up of the 24,000 tonnes per year first phase in Kwinana, Western Australia, expected to take between 12 and 18 months.

But Tianqi, which last month admitted having difficulty paying back loans taken out for the $US4.1 billion ($A7.1 billion) purchase of a 23.8 per cent stake in Chilean miner SQM in 2018, said its "tight liquidity situation" had intensified since the start of 2020 due to the virus outbreak.

The commissioning of the first phase of the lithium hydroxide plant had therefore been postponed, Tianqi said in a filing to the Shenzhen Stock Exchange in response to questions from the securities regulator in its home province of Sichuan, without providing a further timeline.

The Kwinana plant is one of a number of metals projects around the world to be impacted by the coronavirus, which has infected more than 305,000 people globally and has resulted in both miners and smelters reducing operations.

Lithium hydroxide prices are at $US10.25 per kg, according to the London Metal Exchange and price reporting agency Fastmarkets, down from $US15-$US17 per kg in March 2019, as ample supply swamps weak demand.

Tianqi had flagged a delay to the Kwinana project's second phase in September amid falling prices, which - together with a 2.2 billion yuan ($A535 million) impairment provision for the SQM investment - will put the Chinese company on track to swing to a net loss of 2.8 billion yuan in 2019.

On Sunday, Tianqi also said its engineering, procurement and construction (EPC) contractor on the project, Perth-based MSP Engineering, had lodged a claim with Western Australia's Supreme Court seeking $A36.11 million from Tianqi's Australian unit over an unpaid invoice.

Tianqi said it disputed the claim and that the two sides were discussing how to resolve the matter.

Austrlaian Associated PressBack to Breaking News

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