Two major companies are investing in a new lithium processing facility in Western Australia, betting that demand for electric vehicle batteries will rise in the long term. Chilean miner SQM and Australian conglomerate Wesfarmers announced plans to build a second concentrator through their joint venture, Covalent Lithium.
The facility will process spodumene, a mineral from which lithium is extracted. Lithium is a key component in rechargeable batteries used in electric cars and energy storage systems. The companies expect global electric vehicle adoption to increase over time, even though the market has seen recent price swings.
Covalent Lithium already operates one concentrator at the site. Adding a second unit will double the venture's processing capacity. The project is part of a broader push by miners to secure supplies of critical minerals as automakers ramp up EV production.
Western Australia is a major source of lithium ore, supplying a large share of the world's hardrock lithium. SQM and Wesfarmers have been partners in Covalent Lithium since 2017. The new concentrator will require significant investment and is scheduled to begin production in the coming years.
The decision reflects confidence in the long-term outlook for lithium demand. While short-term prices have fallen due to oversupply and slower EV sales growth, companies like SQM and Wesfarmers are preparing for a future where electric vehicles become more common globally.