The start of work on a $400 million lithium plant in Perth was proof that WA's economy was moving on from the mining boom, says WA Premier Colin Barnett.

The mineral lithium is in high demand thanks to its use in renewable energy storage and in batteries for a range of products, including electric cars, as well as uses in glass and ceramics.

Tianqi Lithium Australia general manager Phil Thick and Tianqi Lithium Corporation CEO Vivian Wu at the groundbreaking ceremony for the company's $400m lithium hydroxide plant in Kwinana.

The world's largest lithium producer, Chinese company Tianqi has invested in and will operate the 24,000 tonne a year plant that will produce lithium.

The project in Perth's Kwinana industrial area would create 500 jobs while being built and 115 when in operation.