Greenbushes currently produces 80,000 tonnes per annum of lithium carbonate equivalent, and the expansion will see capacity reach 165,000tpa by 2021.

According to Tianqi, capital costs will be around $A320 million, comprising a second concentrator and crusher.

Commissioning of the expansion is expected to begin in the June quarter of 2019, coinciding with the start of production at Tianqi’s new $A400 million lithium hydroxide plant in Kwinana in late 2018.

"This project is integral to our announced lithium expansion plans so that we can meet the growing needs of our customers,” Albemarle Lithium and Advanced Materials president John Mitchell said.

Greenbushes boasts an eye-watering grade of 2.8% lithium oxide, and Mitchell told Albemarle’s investment day in New York overnight that the grade would likely fall to 2.2% to expand the life.

Mitchell said the Greenbushes would have the advantage of scale.

“We are feeding in a 2.8% ore grade, probably for the expansion will be a little bit less than that,” he said.

“And so, you lose some efficiencies in the upgrading facility, but we hope that that's going to be offset by some scale benefits and other technology that we are working on as well.

“So right now, we are not giving any indication that economics are going to fluctuate very much from where they are today.”

At the ground-breaking ceremony for the hydroxide plant in October, Tianqi CEO Vivian Wu said studies into the expansion were progressing.

She told reporters at the time that the rise in the lithium price meant it was the perfect time to expand.

“We’re expanding and we’ll continue tapping into our strengths. To help our customers sustainably, not to grab the short-term spot price,” she said.

Tianqi’s hydroxide plant will produce an initial 24,000tpa of lithium hydroxide, but will also be expandable.

Albemarle and Tianqi each own 50% of Greenbushes operator Talison Lithium.