Liontown Resources has secured an investment of $250m from LG Energy Solution to support the production ramp-up of the former’s Kathleen Valley project in Australia.
The parties have also agreed on a long-term partnership to secure lithium supply chain and exploring future growth opportunities.
In this regard, Liontown Resources and LG Energy Solution have entered into a convertible note subscription agreement.
They have also agreed to extend their offtake agreement for lithium spodumene supply from the Kathleen Valley project by an additional 10 years.
The parties had originally signed a 5-year offtake agreement in June 2022 under which Liontown Resources is to procure up to 150,000 dry metric tonnes per annum of spodumene concentrate, starting from this year.
The extended agreement will now enable supply of 700kt of spodumene concentrate over the first five years and 1,500kt of the resource over years six to 15.
Liontown Resources chairman Tim Goyder said: “Liontown is very pleased to formalise this strategic partnership with LG Energy Solution, one of the world’s leading battery producers, marking a significant milestone in our journey towards becoming a globally significant supplier of battery minerals as the world transitions to a low-carbon future.
“This partnership and investment is consistent with our downstream refining strategy to capture the value of vertical integration and deliver substantial value to our shareholders and key stakeholders over the long term.”
Currently, the Kathleen Valley project in Western Australia is expected to produce its first lithium spodumene by the end of this month.
Apart from the extended offtake agreement, Liontown Resources and LG Energy Solution will enter into a downstream collaboration to assess the feasibility of constructing a lithium refinery. The lithium facility is planned to be used for processing Kathleen Valley’s spodumene into battery-grade lithium chemicals.
LG Energy Solution CEO David Kim said: “The agreement represents another significant step in our value chain investment strategy aimed at enhancing its resilience to market uncertainties.
“By partnering with strong players like Liontown, we will continue to secure stable supply of IRA-compliant critical minerals, fulfilling our efforts to provide competitive power solutions for electrification.”
In late 2023, Liontown Resources obtained a financing commitment of around A$1.14bn ($758m) to fully fund the Kathleen Valley lithium project to first production and beyond.
