Liontown happy being ‘fast-follower’ in downstream pursuits

The Tony Ottaviano-led lithium hopeful will receive a $300 million government boost to tide its costly Kathleen Valley development, while weighing up its options for downstream processing.

Lithium developer Liontown Resources revealed to the market on Monday that it had shored up joint letters of support from Australia’s Export Finance Australia and its equivalents in the United States and Korea.

The $300 million will go towards covering the costs of building Kathleen Valley - which, like many projects in Western Australia - has suffered a string of cost blowouts since construction started in 2022.

Kathleen Valley's latest price tag was reported at $895 million and the market is currently holding out for Liontown to award its underground mining services contract, which will dictate whether the project’s budget is stretched out further.  

Kathleen Valley is on track for first production within the next 12 months.

Speaking at Kalgoorlie’s Diggers & Dealers forum on Monday, the company's animated managing director Tony Ottaviano said he didn’t want to ‘simply assume’ that downstream processing was value maximising, but prove it.

As well as raking in new funding, Liontown announced that it had inked an agreement with Japan’s Sumitomo Corporation to investigate a lithium supply chain between the two countries.

Mr Ottaviano explained that the downstream pathway chosen would need to be robust through market cycles. The company is also seemingly not confined to Australia for any proposed processing infrastructure. 

“I don’t want to rush this because, it’s technically challenging. I need to make a bet as to what chemistry is going to win, so there’s a lot of merit in being a second mover here, or a fast follower,” he said.

“Let’s see [about the ones here] in Australia whether they can get to nameplate and then let’s learn from those issues that they’ve had, like we’ve done with the plant. And then we can move.”

Mr Ottaviano was also stoic when asked regarding inbound interest from US lithium giant Ablemarle, saying he was focused on building Kathleen Valley. 

In late March, Liontown revealed it had been the subject of several indicative proposals from the company, which has a strong presence in WA lithium. 

"Our focus has been very much on building the project, so that's what we're doing," he said. 

"If we get approached by them or another party and the offering is compelling, well I've got a fiduciary duty to put that to my shareholders as a director. But until something like that happens then I'm focused on building this thing."

Exploration veteran and Liontown chair Tim Goyder has an approximate 15 per cent stake in the company.