Australian lithium developer Liontown Resources on Tuesday announced an expanded strategic partnership with foundation customer and major lithium-ion battery manufacturer LG Energy Solutions.
The companies executed agreements for a five-year, $250-million convertible note, a ten-year offtake extension, and a downstream collaboration agreement to investigate the feasibility of establishing an Inflation Reduction Act- (IRA-) compliant conversion plant to process offtake material and potential additional tonnes from any future four-million-tonne-a-year expansion.
“LG Energy Solution’s long-term investment in Liontown is a testament to the world-class quality of the Kathleen Valley project and a tremendous endorsement of the capability of our team,” commented Liontown MD and CEO Tony Ottaviano.
The funding, he said, would be instrumental in supporting the production ramp up to three-million tonnes a year and early works necessary to preserve the potential four-million-tonne-a-year expansion case for Kathleen Valley.
The Kathleen Valley project remains on budget to first production, with about A$120-million budgeted and planned to be spent for capital costs to complete construction and commissioning. The balance of A$381-million of additional liquidity provides balance sheet strength to fund Kathleen Valley ramp-up to three-million-tonnes a year steady-stage production.
Liontown is progressing early enabling works in the underground mine to preserve the expansion option on a 2027 timeframe. Optimisation studies are also continuing for both the mine and processing plant as part of its review of the four-million-tonne-a-year expansion case.
A board decision on whether to proceed is expected before the end of the calendar year.
Regarding the offtake agreement, the extension provides for a spodumene concentrate volume increase with a target of 6% lithium oxide grade (SC6) from the initial 100 000 t/y in year one, to 150 000 t/y in years two to five, rising to 160 000 t/y in years six to ten and subsequently reducing to 140 000 t/y in years 11 to 15.
The extension also includes a commitment to make up to an additional 250 000 t/y SC6 available to LG Energy Solution over the first ten years of the 15-year offtake term.
Further, Liontown explained that the feasibility study with LG Energy solutions regarding a refinery to process Kathleen Valley spodumene into battery-grade lithium chemicals would continue in parallel to the existing downstream prefeasibility study with Sumitomo.
“These developments pave the way for Liontown to pursue our long-term strategy to be a globally significant provider of battery minerals as the world transitions to a low-carbon future,” said Ottaviano.