Liontown Resources has teamed up with Tesla for the supply of spodumene concentrate from its Kathleen Valley lithium project in Western Australia.
Across an initial five-year contract commencing in 2024, Tesla will purchase 100,000 dry metric tonnes (dmt) of spodumene in the first 12 months, with 150,000 dmt to be supplied each year across the four years following.
This represents 30 per cent of Kathleen Valley’s start-up production capacity of circa 500,000 dmt per annum.
“Tesla is a global leader and innovator in electric vehicles and having it sign up to become a significant customer is a tremendous achievement and another huge vote of confidence in the quality of the Kathleen Valley project,” Liontown managing director and chief executive officer Tony Ottaviano said.
“This means that we now have two of the premier companies in the global lithium-ion battery and EV space signed up as foundational customers, marking a significant step towards realising our ambition to become a globally significant provider of battery materials for the clean energy market.”
In January, Liontown inked an offtake deal with South Korean global battery manufacturer LG Energy Solution, also involving the supply of up to 150,000 dmt per annum of spodumene. In two agreements, Liontown has sealed up 60 per cent of its initial spodumene production capacity.
The emerging mining company 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 has also suggested 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).
The Tesla agreement is subject to Liontown commencing commercial production at Kathleen Valley by 2025, while the two parties will have to execute the completion of the deal by the end of May 2022 for it to come to fruition.
Liontown has cautioned investors that despite the agreement’s initial confirmation, there are still negotiations and detailed definitive agreements that need to be executed before it is actioned.