A $545 million lithium mine in Western Australia has been authorized for trend after its owners, ASX-listed Liontown Sources, signed a deal nowadays with US huge Ford Motor Firm to create the battery steel and relieve the project with a huge mortgage.
Key points:
- The Kathleen Valley lithium mine, 680km north-east of Perth, is targeting first production in 2024
- The mine owners maintain locked in offtake deals with car producers Ford and Tesla and battery maker LG Vitality Resolution
- The cost of constructing has blown out from fashioned estimates of $473 million closing twelve months to $545 million
The inexperienced light for the Kathleen Valley mine, 60km north of Leinster in WA’s Goldfields, follows closing twelve months’s approval for the $1.9 billion Mt Holland lithium mine shut to Southern Substandard and a refinery at Kwinana.
Nowadays’s deal between Perth-based completely Liontown and Michigan-headquartered Ford is for the annual provide of as much as 150,000 dry metric tonnes of spodumene pay consideration for five years, initiating from 2024.
It follows similar transactions with Elon Musk’s Tesla and South Korean battery maker LG Vitality Resolution.
As portion of the deal, Ford will provide Liontown with a $300 million mortgage to fund the project’s trend.
The firm raised $450 million closing twelve months, so is successfully funded to veil the attain charges, no matter a $72 million blowout on initial estimates to $545 million.
‘Globally relevant’ lithium mine
In an announcement to the ASX, Liontown’s managing director Tony Ottaviano described the closing investment decision by the board as comely the initiating, and acknowledged the “central job lies ahead” to soundly develop and commission the mine.
“The signing of our third and closing foundational offtake settlement is a momentous milestone for Liontown and the Kathleen Valley project, with roughly 90 per cent of Kathleen Valley’s originate-up ability now below secured long-term binding offtake agreements,” he acknowledged.
“Our disciplined methodology to our offtake strategy has enabled us to develop a buyer nefarious of tier-one, globally major customers within the electric car battery provide chain, validating Kathleen Valley’s repute as a globally relevant lithium asset.
“As successfully as to the offtake, the $300 million funding facility from Ford, alongside with the capital raised closing twelve months, manner that now we maintain got secured commitments for the funds required to toughen the fat industrial trend of Kathleen Valley thru to first production.”
Ford’s vice president of electric car industrialisation, Lisa Drake, acknowledged it became as soon as a serious deal for the auto maker.
“Ford continues working to provide more deeply into the battery provide chain to meet our targets of delivering more than two million electric autos yearly for our customers by 2026,” she acknowledged.
WA lithium production on the upward thrust
Liontown educated the ASX it had already placed orders for 73 per cent of long-lead items for the processing plant, price an estimated $83 million.
Mining is anticipated to originate early next twelve months to procure stockpiles of ore ahead of the commissioning portion.
Kathleen Valley is forecast to create about 500,000 tonnes of spodumene pay consideration a twelve months, with plans to create greater to 700,000 tonnes in 2029.
It will most likely well add to WA’s increasing series of lithium mines in production, which already involves the Greenbushes mine within the South West, the Pilgangoora and Wodgina mines within the Pilbara, Mt Cattlin shut to Ravensthorpe within the Immense Southern, and the Mt Marion and Bald Hill mines within the Goldfields.
Mt Holland — a 50: 50 joint accomplishing between Wesfarmers and Chile’s SQM — is due to originate production within the 2d half of 2024.