Liontown agreement with Tesla sets up Kathleen Valley

electric vehicles

Liontown Resources’ $473 million Kathleen Valley Lithium Project in Western Australia is well on its way to commencing commercial production on schedule following its newest agreement with electric vehicle (EV) manufacturer Tesla.

Liontown has entered into a five-year legally binding agreement with Tesla for the supply of lithium spodumene concentrate that is expected to commence in 2024.

Major construction of the Kathleen Valley project is scheduled to commence by the fourth quarter of 2022, following the completion of a positive definitive feasibility study (DFS) late last year.

The DFS supports an initial 23-year mine life, and the development forecast is to initially produce 500,000 tonnes per annum (tpa) of spodumene concentrate, with plans to expand that to 700,000tpa.

Liontown has been disciplined in executing its offtake strategy for Kathleen Valley, targeting large foundation agreements which aim to deliver diversification both by geographic location and customer position in the global battery value chain, while at the same time retaining some capacity to sell into the rapidly growing spot market.

The agreement with Tesla is conditional upon Liontown commencing commercial production at Kathleen Valley by 2025, which is on track.

This is the second offtake arrangement secured for Kathleen Valley following the foundational offtake arrangement with LG Energy Solutions in January 2022.

Liontown and Tesla will now work together to complete the negotiation and execution of detailed definitive agreements which must be completed and executed by 30 May 2022.

“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,” Liontown managing director and chief executive officer Tony Ottaviano said.

“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.

“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.

“Our shareholders should be proud that future Tesla cars will be powered by Liontown lithium.”

“We look forward to working with Tesla as long-term partners for many years to come.”

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