Join our daily newsletter At The Bell to receive exclusive market insights
- Liontown Resources (LTR) pens a deal with electric vehicle manufacturer Tesla for the supply of lithium spodumene concentrate
- The legally binding sales and purchase term sheet is for the supply of up to 150,000 dry metric tonnes per annum of spodumene concentrate to be produced at Liontown’s Kathleen Valley Lithium Project in WA
- The deal is expected to begin from 2024, representing around one third of the project’s start-up production capacity of roughly 500,000 tonnes per annum
- The deal with Tesla marks the second offtake arrangement for Kathleen Valley, following a foundational deal with LG Energy Solutions, and must be completed by May 30
- Liontown shares last traded at $1.39
Battery materials company Liontown Resources (LTR) has penned a deal with electric vehicle manufacturer Tesla for the supply of lithium spodumene concentrate.
The legally binding sales and purchase term sheet is for the supply of up to 150,000 dry metric tonnes per annum of spodumene concentrate to be produced at Liontown’s Kathleen Valley Lithium Project in WA.
The deal is expected to begin from 2024, representing around one third of the project’s start up production capacity of roughly 500,000 tonnes per annum. It is conditional on Liontown starting production at Kathleen Valley, which is 400km north of Kalgoorlie, by 2025.
“Securing our second offtake sales agreement is another fantastic milestone for Liontown towards the development of the Kathleen Valley Lithium Project, and we are absolutely delighted to have signed this agreement with leading EV manufacturer, Tesla,” said Liontown Managing Director and CEO Tony Ottaviano.
“Our shareholders should be proud that future Tesla cars will be powered by Liontown lithium.”
The pricing will be determined using a formula-based mechanism referencing market prices for lithium hydroxide monohydrate.
Liontown and Tesla have agreed to sit down to complete the negotiation and execution of detailed definitive agreements, which must be finalised by May 30.
The deal with Tesla marks the second offtake arrangement secured for Kathleen Valley, following a foundational deal with LG Energy Solutions.
With the two agreements combined, more than half of Liontown’s predicted production is covered by long-term agreements.
Major construction of Liontown’s $473 million project is scheduled for Q4 2022, following a definitive feasibility study which was completed in late 2021. The ore reserve supports an initial roughly 23-year mine life, with Liontown targeting further expansions.
Liontown said it’s well capitalised to forge ahead with the development of Kathleen Valley, following a $450 million equity raising last year.
Mr Ottaviano noted the company is continuing to progress discussions with more potential customers for the remaining available production.
Meanwhile, the company has been evaluating a pathway through the development of a lithium hydroxide downstream processing facility in WA, which is currently at pre-feasibility study level.
Liontown shares last traded at $1.39.
