Mining Technology

Daily Newsletter

08 August 2023

Daily Newsletter

Japan’s Sumitomo to study lithium hydroxide production with Liontown

The companies will build a supply chain that will extend from lithium mining in Australia to lithium hydroxide production.

Japanese trading company Sumitomo has signed an agreement to jointly work with Australian lithium developer Liontown Resources to study lithium hydroxide production in Japan.

The move comes as several companies worldwide look to secure lithium, which is said to be a key metal in manufacturing electric vehicles (EVs) batteries.

Liontown is developing the Kathleen Valley lithium mine in Western Australia. The project is scheduled to start production of hard rock lithium concentrate in mid-2024.

By collaborating with Liontown, the Japanese trading house will build a supply chain that will extend from the mining and processing of lithium concentrates at the Kathleen Valley mine to the lithium hydroxide production to provide a stable supply of the metal to Japan and overseas.

Sumitomo said in a press statement: “Sumitomo Corporation and Liontown Resources will leverage their respective strengths to contribute to the stable supply of lithium and further contribute to the creation of a decarbonised society.”

Sumitomo spokesperson was cited by Reuters as saying that the two companies are planning to conduct a joint study over a period of two years to decide the scale of the lithium hydroxide production.

Located in an established mining region 60km north of Leinster and 680km north-east of Perth, the Kathleen Valley mine has a current mineral resource estimate of 156 million tonnes at 1.4% Li₂O and 130ppm Ta₂O₅.

Liontown has already signed deals to sell lithium from the Kathleen Valley mine to Tesla, LG Energy Solutions and Ford.

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.