Albemarle delay overshadows Stardust refining win

US lithium refining buildout takes one step forward but two steps back

Albemarle delay overshadows Stardust refining win
Stardust will build its facility in Muskogee, OK.

Lithium refiner Stardust Power will invest $1.2bn in what is targeted to be the largest battery-grade lithium refinery in the US. But this positive step for a domestic North American battery supply chain has been offset by North Carolina chemicals firm Albemarle postponing a planned lithium conversion facility.

Stardust's Muskogee, OK project is set to produce 50,000t/yr of lithium carbonate, which, after the deferment of Albemarle's proposed 100,000t/yr (in an expansion phase from an initial 50,000t/yr) capacity refinery, becomes the largest lithium plant currently moving forward in the US.

Stardust says it expects to be eligible to receive up to $257mn in state and federal economic incentives for its facility. And the firm may also be eligible for further federal grants and/or incentives offered by the Department of Energy and the Department of Defence.

The extent of incentives on offer for midstream raw material processing speaks to, often bipartisan, political recognition of the need to attract investment in an area where China has been able to rise to global dominance.

The US is replete with raw lithium reserves but as yet a midstream refining industry for battery materials is nascent. And China holds sway over approximately two thirds of the global lithium refining industry.

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"Currently there is no large-scale refinery for battery-grade lithium in the US, exposing the country to undue national security and supply chain risk,” says Stardust CEO Roshan Pujari. There are, however, several refineries currently under construction in the US, including a high-profile project by US EV maker Tesla in Texas.

Tesla's project is, though, set to have an initial annual capacity of only 17,000t, albeit with capacity to expand to 180,000t/yr. But compared to projected demand of 715,000 / yr by 2030, the US still faces a significant shortfall based on the current pipeline of projects.

"Stardust Power selected Muskogee, OK for its refinery because of Oklahoma’s central US location, facilitating delivery of lithium inputs and shipment of battery-grade lithium products over multiple transportation routes to support the company’s refining operations," Stardust says, also citing "the area’s superior intermodal freight transport."

As for Albemarle, the postponement of its planned lithium hydroxide mega-flex facility in Richburg, SC is part of measures announced by the company to "re-phase its organic growth investments and optimise its cost structure in response to changing end-market conditions, particularly in the lithium value chain".

"These actions are designed to unlock cash flow over the near term and generate long-term financial flexibility," Albermarle adds. Construction of the refinery had been planned to start in late 2024

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Data from intelligence firm Fastmarkets  indicates that China had a 66pc market share of refined lithium in 2023, a figure that is expected to remain relatively steady at 59pc by 2033 despite capacity growth in the rest of the world. The US produced just 53,000t of refined lithium in 2023, versus demand of 637,000t, Fastmarkets estimates.

"Even with the capacity announcements from both integrated and non-integrated refineries in the US, there is likely to be a shortfall in domestic processing capacity in the long term. This is due to the difficulty in bringing projects online, especially those that include raw material extraction [which] typically face permitting difficulties," says Fastmarkets battery raw materials analysts Jordan Roberts.

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