February 6, 2025: China’s Tianqi Lithium and project partner IGO have suspended a major expansion of their battery-grade lithium hydroxide refinery venture in Western Australia, amid a weak lithium market and increasing stockpiles at the refinery.

Chinese premier Li Qiang visited the Kwinana plant last year to trumpet the project as a key link in the Asian battery tiger’s EV battery global supply chain.

But Tianqi confirmed in a Hong Kong stock exchange announcement on January 23 that its board had approved a cessation of investment and construction of the second phase at Kwinana.

Tianqi said the move was “a prudent decision in response to market dynamics”, while the first phase at Kwinana would continue its “capacity ramp-up”.

Tianqi holds a 51% controlling stake in the company developing Kwinana — Tianqi Lithium Energy Australia (TLEA) — with IGO holding 49%.

IGO said it expects to substantially write down the value of its Kwinana investment, although it had yet to work out the potential size of the impairment.

Tianqi said it expects to post a preliminary net loss of between RMB7-8 billion (around $1 billion) for 2024, but said there would be no material adverse impact on existing operations overall.

Tianqi operates four lithium production bases in China and is building a battery-grade lithium hydroxide project with an annual capacity of 30,000 tonnes at its Zhangjiagang site.

Meanwhile, Chilean copper commission Cochilco has warned that a global surplus of lithium is set to continue throughout this year.

Cochilco said in its global lithium market report that production cutbacks by companies in response to low prices had tightened supply forecasts.

However, the global market is still likely to post a surplus of 89,000 tonnes of lithium in 2024 and 141,000 tonnes in 2025, according to the report.