Australian lithium miners want more value from Chinese-dominated battery supply chain

Australia, a global leader in lithium reserves, is pushing to capture more value from the battery supply chain by increasing domestic processing of lithium-ion battery components. The nation holds the world's second-largest lithium reserves, with 7 million tonnes in 2024, trailing only China's 9.3 million tonnes.

Despite the abundance of the mineral, Australian miners have historically exported lithium in its raw form, primarily spodumene, to China for processing into battery chemicals. While lithium prices have rebounded after a significant slump that led to the mothballing of at least three Australian mines between 2022 and 2025, commercial success in advanced processing within Australia has been limited.

However, a select group of Western Australian miners are beginning to undertake further processing steps, converting spodumene into battery-grade ingredients. This move aligns with strategic goals at state, federal, and international levels to develop critical mineral processing capacity outside of China's dominance.

Companies like Liontown are actively pursuing these opportunities. Liontown has entered into a "downstream collaboration agreement" to explore the establishment of an "IRA-compliant lithium refinery." This initiative aims to produce refined lithium from spodumene concentrate mined at its Kathleen Valley project, responding to the increasing global demand for battery energy storage systems (BESS). Analysts predict BESS will become a primary driver of future lithium demand, fueled by AI infrastructure build-outs and broader energy security concerns.