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Liontown inks landmark offtake deal with Korean heavyweight

Liontown

Liontown has executed its first offtake agreement for the Kathleen Valley lithium project in Western Australia after signing a deal with South Korean global battery manufacturer LG Energy Solution.

Expected to commence in 2024, the initial five-year agreement will see Liontown supply LG Energy Solution with up to 150,000 dry metric tonnes (dmt) per annum of spodumene concentrate produced from Kathleen Valley.

This represents approximately one third of the project’s start-up spodumene production capacity of approximately 500,000 tonnes per annum.

LG Energy Solution (LGES) is one of the world’s battery heavyweights, having established itself as a global leader in delivering lithium-ion batteries for electric vehicles (EVs) and other applications such as mobility and information technology (IT), and energy storage systems.

With the demand for lithium-ion batteries continuing to grow in the wake of the electrification movement, LGES is constantly expanding its business and requires trusted partners to provide the necessary resources.

Liontown has been targeting large foundation agreements as part of its Kathleen Valley offtake strategy, ensuring its partners are diversified both in their geographic location and customer position in the global battery value chain.

The company also suggests the potential of commercialising some of its spodumene through a spot market, similar to what Pilbara Minerals has done through its Battery Material Exchange (BMX).

This agreement marks the first binding commitment from LGES to acquire Australian-sourced spodumene concentrate and follows on from South Korea President Moon Jae-in’s recent visit to Australia in December, where bolstering the supply of critical minerals to the country was the principal talking point.

Liontown managing director and chief executive officer Tony Ottaviano said securing this offtake agreement is a huge milestone for the Kathleen Valley project.

“The signing of this historic first offtake term sheet for Kathleen Valley represents a fantastic outcome for our shareholders and marks a very satisfying result for the Liontown board and team,” he said.

“We have been steadfast in our strategy to negotiate terms that we believe accurately reflect the significance of our position in the global lithium market, as well as the quality and location of our Kathleen Valley resource to ensure that we extract the best value for our shareholders.”

The agreement also represents a strong vote of confidence in Kathleen Valley – a project still realising its lofty potential.

“Not only is this offtake term sheet consistent with our strategy, it also represents a strong validation for the Tier-1 credentials of the Kathleen Valley project as one of the world’s premier new spodumene projects,” Ottaviano said.

“Having a customer of the calibre and standing of LGES endorse the project, by signing up to become a foundation customer, represents a significant vote of confidence in Kathleen Valley and in Liontown’s ambition to become a globally significant provider of battery materials for the clean energy market.”

Liontown aim to commence production at Kathleen Valley in the second quarter of 2024 with an initial base production of 2.5 million tonnes per annum delivering approximately 500,000 tonnes of spodumene.

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