Liontown to supply Tesla with spodumene for electric vehicle (EV) batteries

Liontown Resources Limited have announced an agreement to supply Tesla with spodumene concentrate from its flagship 100 percent owned Kathleen Valley Lithium Project. The partnership, a full-form Offtake Agreement, will see the Australian-based battery minerals company supply up to 150,000 dry metric tonnes (DMT) of spodumene concentrate per annum. 

This amount is just under one-third of Kathleen Valley’s start-up production capacity of 500,000 DMT per year. Supply is expected to commence in 2024. The Offtake Agreement is conditional upon Liontown commencing commercial production at the Kathleen Valley Lithium Project by no later than 1 December 2025.

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The Offtake Agreement with Tesla is the second definitive agreement secured for Kathleen Valley. This follows the foundational offtake agreement with LG Energy Solutions (LGES) that was announced last month

Together with the LG Energy Solutions agreement, this means that up to 60 percent of Liontown’s planned production is now covered by long-term agreements with high-quality customers.

Liontown continues to receive strong interest from a range of parties for the remaining third offtake. This, once completed, will result in approximately 85 percent of the production from Kathleen Valley contracted. The remaining production will be sold on spot or Liontown has an option to sell to existing customers.

Tony Ottaviano, Liontown CEO and managing director, said: “We are pleased to have concluded negotiations with Tesla allowing us to execute our second full form Spodumene Concentrate Offtake Agreement. 

“Tesla is a global leader and innovator in electric vehicles and having formalised arrangements for it to become a significant customer is a tremendous achievement. 

“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.”

Ian Osborne
Ian Osborne
Editor-in-Chief at ElectricDrives

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