LG first taker for Liontown

Liontown has found its first binding offtake partner in South Korean battery giant LG Energy Solution, who is lined up to acquire one third of Kathleen Valley’s start-up production capacity.

The binding lithium spodumene concentrate term sheet, announced to the ASX today, is for an initial five-year period and will start with the sale of 100,000 dry metric tonnes in the first year.

This will increase to 150,000 dry metric tonnes in the years following.

It marks Liontown’s first offtake agreement since outlining a A$473 million definitive feasibility study for Kathleen Valley in November, revealing the site’s potential as one of the largest lithium mines in the world.

Pricing will be based on market prices for lithium hydroxide monohydrate.

Liontown expects first production from Katheen Valley in Q2, 2024 with initial base production of 2.5 million tonnes per annum delivering about 500,000 tonnes per annum of spodumene concentrate.

The lithium aspirant implied it had no shortage of potential long-term offtake partners, but had been looking for large foundation agreements delivering geographic diversity and a place in the global battery value chain.

Negotiations with “several tier-one” customers are continuing.

The deal also represents a signal towards growing trading ties between Australia and South Korea, following suit from Pilbara Minerals’ joint venture with South Korean steel making company Posco.

Liontown managing director Tony Ottaviano said the agreement represented strong validation for Kathleen Valley’s credentials.

“We have been steadfast in our strategy to negotiate terms that we believe accurately reflect the significance of our position in the global lithium market, as well as the quality and location of our Kathleen Valley resource,” Mr Ottaviano said in a statement.

“Having a customer of the calibre and standing of LGES endorse the Project, by signing up to become a foundation customer, represents a significant vote of confidence in Kathleen Valley.”

Liontown shares closed the day up 5.16 per cent to trade at $1.63.