Operational optimisation and project expansions to drive Australia’s lithium supply in 2026

Australia remains the world’s largest lithium producer, accounting for 33.5% of planetary lithium output successful 2025. The country’s lithium excavation accumulation is estimated to person accrued to 113,500 tonnes (t) successful 2025, a 1.8% marginal maturation implicit 2024. This constricted maturation was chiefly supported by the ramp-up of Liontown Resources’ Kathleen Valley task and SQM’s Mt Holland lithium project, some of which commenced operations successful mid-2024, alongside ongoing expansions astatine the Pilgangoora and Greenbushes lithium operations.

However, persistently anemic spodumene prices and cost-cutting measures person prompted respective producers to standard backmost operations. Key examples of this market-driven consolidation see PLS Group Limited (formerly Pilbara Minerals) placing its Ngungaju works nether attraction and attraction successful December 2024, Mineral Resources (MRL) suspending operations astatine its Bald Hill task successful November 2024 (which remains suspended arsenic of January 2026), and Rio Tinto Lithium halting operations astatine Mount Cattlin successful March 2025. Collectively, these shutdowns item a strategical manufacture displacement toward superior preservation and operational rationalisation successful effect to the existent pricing downturn.

Looking ahead, Australia’s lithium output is expected to rebound successful 2026, with accumulation projected to turn by 6% to scope 120,300t. This maturation volition beryllium driven chiefly by operational enhancements and capableness expansions astatine cardinal mining sites. A large contributor volition beryllium the Kathleen Valley project, which completed its phased modulation from open-pit mining to a afloat underground cognition connected 21 December 2025, and is present ramping up accumulation arsenic planned. This modulation is aimed astatine targeting higher-grade ore, improving operating margins, and enhancing semipermanent operational ratio and sustainability.

Further upside to output maturation is expected from continued enlargement activities astatine the established Greenbushes lithium operations and the Pilgangoora project, some of which are acceptable to lend materially to wide proviso maturation done 2026, reinforcing Australia’s presumption successful the planetary lithium market.

From a argumentation perspective, the Australian Government is actively attracting investments successful the captious minerals manufacture done the Critical Minerals Strategy 2023–2030 and the "Future Made successful Australia" plan. These see important backing and taxation incentives (a 10% accumulation taxation inducement for processing and refining costs) to promote backstage concern successful the captious minerals sector.

In February 2026, the Australian Government released its Critical Minerals Prospectus, profiling 78 investment-ready projects from 60 companies, including 1 lithium project. The prospectus besides listed 29 midstream processing opportunities, 4 of which were lithium-related. Core Lithium’s Finniss Lithium Operation was shortlisted successful the upstream class portion Albemarle’s Kemerton lithium hydroxide processing plant, Tianqi Lithium Energy Australia’s Kwinana lithium hydroxide refinery, Livium’s Livium project, and Li-S Energy’s lithium metallic foil enactment were shortlisted nether midstream processing.