Despite opposition from local shire and farmers, the US chemicals giant Albemarle has progressed plans for a temporary 500 bed workers' village on farmland south of Perth.
As the company waits for a final investment decision on expansion of its nearby Kemerton lithium refinery, 150 kilometres south of Perth, the company wants to build a 128 villa workers accommodation site in the small seaside town of Binningup.
The Shire of Harvey refused the application for the camp last month, saying it was not consistent with the local area's farming purposes.
Western Australia's development assessment panel voted against the shire's refusal on Monday.
The panel voted not to make a decision about or against the proposal and instead put the plan out for public comment.
Albemarle's refinery was originally going to produce 100,000 tons of lithium hydroxide a year, but the output projection was halved in 2020 due to a drop in lithium prices.
An expansion is on the cards, as the price index for lithium hydroxide has gone up more than 400 per cent over the past year.
The company produced its first lithium hydroxide last month.
Albemarle lawyers told the development panel that the proposal was much smaller than mining camps in the north-west of the state.
Claire Willey said that any impact from the village on the community and surrounding areas could be managed.
It can be compatible with surrounding agriculture. The panel was told that the temporary workers village on Binningup's main road would be in place for 10 to 15 years and would be hidden from the street.
A large fence would be in place to protect against spray drift from local farms.
The Harvey Shire president Paul Gillett told the panel that the area should be mainly used for farming, and urged its members to reject the application.
Planning consultant Paul Kotsoglo represented farmers on properties next to the site.
He told the panel that the site was too close to a nearby market garden, which needed to apply spray to crops, only a few hundred metres from the nearest villa.
It is not consistent with the plan. The panel voted against a motion by Mr Gillett that it would not accept the application outright.
Karella Hope, panel member, said she felt it needed to be put out for comment, even though the panel could have made a decision.
She said she appreciated the strong community interest.
Ms Hope said that the panel did not have the discretion to consider it as a residential building.
The proposal is going to be put out for comment for 45 days later this week.
A spokeswoman for Albemarle said the company would continue to work with the shire.
The best outcome for the community is for us to operate a successful business with purpose-built amenity for all workers in a temporary accommodation village, with flow on benefits to local business and the economy. The town considers the purchase of a large piece of land for development by Andrew Forrest, as a result of the planned camp in Binningup.
The property development company of the Forrest family said it plans to reopen the town's old golf course and reactivate the 260 hectare coastal site.
It comes as the WorkSafe probes Albemarle for a series of unsafe work practices.