Lithium

Liontown signs Ford as third and final lithium offtake partner

Wed 29 Jun 22, 10:18am (AEST)
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Key Points

  • Liontown has signed a binding offtake agreement with Ford for the supply of up to 150,000 tonnes per annum
  • Ford will also provide Liontown with a separate debt funding facility of $300m

Liontown (ASX: LTR) and Ford have signed a binding offtake agreement for up to 150,000 dry metric tonnes of spodumene over an initial term of 5-years from first production. The company's stock is up 15% in early trade.

Together with previously announced binding offtake agreements with Tesla and LG Energy Solution, Liontown’s total offtake commitments now sit at up to 450,000 dmt per annum or approximately 90% of Kathleen Valley’s initial production capacity of 500,000 tonnes per annum.

Liontown said that the remaining production will be retained for spot volume sales and/or discrete offtake agreements. Sounds like something out of Pilbara Minerals’ (ASX: PLS) playbook.

Separately, Ford said it will provide a $300m debt facility to Liontown to support the development costs of Kathleen Valley. 

“ … together with the capital raised last year, means that we have secured commitments for the funds required to support the full commercial development of Kathleen Valley through to first production,” said CEO Tony Ottaviano. 

Liontown is expected to deliver its front-end engineering design, which defines project requirements and cost estimates, in the second-quarter of 2022. The company is targeting a final investment decision in the first-half of 2022 and hopes to commence early works in the second-half.

Key contracts for project construction have been issued for tendering, with bids under review and the procurement of long lead-time equipment is in progress.

If all things go to plan, Liontown expects to make its first spodumene production in the second quarter of 2024.

Liontown price chart
Liontown price chart

 

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Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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