Covalent Kwinana lithium hydroxide output begins as refinery enters production phase

Covalent Lithium

Commissioning shifts to production at Australia’s third hydroxide refinery

Covalent Kwinana lithium hydroxide output has started, marking a key commissioning milestone. The 50,000 t/yr refinery has moved into production. The company is preparing commercial samples for customer qualification. The plant can support about one million EV batteries yearly. That estimate assumes average 50kWh battery packs. Covalent Kwinana lithium hydroxide output adds new supply in Western Australia.

Vertical integration supports ramp, but expansion remains uncertain

Covalent Kwinana lithium hydroxide output draws feed from Mount Holland. The mine and concentrator supply the Kwinana refinery. Covalent is a Wesfarmers and SQM joint venture. The site follows IGO-Tianqi Kwinana and Albemarle-Mineral Resources Kemerton. Both plants started in May 2022 during softer prices. Analysts questioned local processing expertise earlier this year. Wesfarmers said it was cautiously optimistic in February. Losses persist, including a A$24mn deficit last August. Expansion plans to 100,000 t/yr remain on hold. The concentrate expansion of 760,000 t/yr is also pending guidance. Therefore, capital discipline shapes near-term strategy.

Market dynamics will influence the ramp profile. Qualification timelines can delay commercial volumes. However, vertical integration should improve cost control and logistics. Reliability and product consistency will determine contract traction. Meanwhile, Australian hydroxide capacity is consolidating. Kwinana’s ecosystem now hosts three operating refineries. Covalent Kwinana lithium hydroxide output strengthens regional battery material clusters.

The Metalnomist Commentary

Covalent’s start-up is strategically important for non-China hydroxide supply. Yet ramp execution and qualification remain the critical hurdles. Watch unit costs, recovery rates, and offtake depth through 2026.