The development is expected to begin within two months, creating up to 500 construction jobs, with approvals advanced.

The plant will process spodumene concentrate from Tianqi’s 51%-owned Talison Lithium Greenbushes mine in WA.

In conjunction with the plant approval, Tianqi said it and Talison partner Albemarle were planning to expand Greenbushes, already the largest spodumene mine in the world, supplying more than 30% of the world’s lithium.

The Kwinana plant will produce 24,000 tonnes per annum of lithium hydroxide.

“Tianqi’s plant will produce the highest quality lithium hydroxide which is required in the electric vehicle and high end energy storage markets,” Tianqi Lithium Australia general manager Phil Thick said.

“The plant’s close location to the mine is more efficient than transporting the bulk product all the way to China, which also reduces delivery risk so we can efficiently and reliably get product to end markets.

“The availability of high quality infrastructure and other inputs, plus the accessibility of technical expertise, were also contributing factors to the decision to locate the processing plant in Australia.”

WA State Development Minister Bill Marmion welcomed the decision, which came at a time of rising lithium demand.

"While Western Australia has been mining and exporting lithium for more than 25 years, this project introduces value-adding secondary processing into the local supply chain,” he said.

"This is very positive news for growing the state's economy as we seek to take a greater role in processing our raw materials to produce higher value products."

MSP Engineering, which led the feasibility study, will be head contractor for the plant development.

Thick said there was scope for future expansion, depending on market conditions.

“The strong forecast demand for lithium is being driven predominantly by a growing market for high performance rechargeable lithium batteries in electric vehicles, consumer electronics and battery storage systems,” he said.

“While lithium is not in short supply globally, Tianqi is committed to ensuring the supply of high quality lithium chemicals to the global market. This security of supply is essential to encourage the continued development of new energy technologies.”

The plant will start production in late 2018, creating more than 115 operational jobs.

Tianqi’s parent company is Shenzhen-listed Tianqi Lithium Corporation, the world’s largest lithium chemicals producer.

It has two existing lithium chemical plants in China, but the Kwinana facility will expand its processing capacity by 50%.