AusGroup secures contract for upcoming lithium refinery in Perth

AUSGROUP 5GJ : 5GJ 0%on Tuesday (Dec 7) announced that it has secured a contract for the construction of a lithium refinery for Covalent Lithium, a joint venture between Australian-listed Wesfarmers and New York Stock Exchange-listed Sociedad Quimica y Minera de Chile.

The 12-month contract will commence in the first quarter of 2022. AusGroup did not disclose the contract value.

Under the contract, AusGroup will supply, fabricate and deliver 58 stainless steel and carbon steel tanks for the refinery.

Highlighting that a large fabrication facility is situated within 4 kilometres of the refinery site, the company believes it is "ideally positioned to deliver the project's construction schedule and provide a seamless and efficient delivery model".

For the project, AusGroup anticipates the recruitment of an additional 100 people to facilitate the delivery of the contract.

The latest awarded contract is for 1 of 3 lithium refineries under construction in Western Australia. It is one of the last contracts to be awarded by Covalent Lithium for the construction of a lithium refinery.

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AusGroup chief executive officer and managing director, Shane Kimpton, attributed the latest contract win to the company's local expertise and capacity, coupled with a "significant track record in safe and timely project delivery".

According to a Sep 1, 2021 press statement issued by the Government of Western Australia, the refinery is located on a 40 hectare site in the Kwinana Strategic Industrial Area in Perth, and is expected to produce around 50,000 tonnes of lithium hydroxide per year.

The contract is part of the Mount Holland Lithium Project, which is managed by Covalent Lithium. The state expects the project to create 1,000 construction jobs and 350 operational jobs.

Based on information provided on Covalent Lithium's website, the lithium hydroxide produced by its upcoming refinery will be used to store renewables, thereby lowering reliance on fossil fuels while also supporting the production of batteries for around 1 million electric vehicles every year.

Shares closed on Tuesday at 2.5 Singapore cents, higher by 0.2 cent or 8.7 per cent, after the announcement.

READ MORE: 

• AusGroup secures A$32m worth of new contracts in Western Australia

• Electric car lithium demand powers mining revival in UK