Offtake arrangements with Tesla formalised with definitive full-form offtake agreement
Liontown and Tesla execute binding Offtake Agreement. (Credit: Possessed Photography on Unsplash)
Australian-based battery minerals company Liontown Resources Limited (ASX: LTR) (Liontown or the Company) is pleased to announce that it has completed negotiations with electric vehicle manufacturer Tesla, Inc. (Tesla) and executed the definitive full-form Offtake Agreement for the supply of spodumene concentrate from its flagship 100%-owned Kathleen Valley Lithium Project (Kathleen Valley).
Liontown is to supply up to 150,000 dry metric tonnes (DMT) per annum of spodumene concentrate, representing approximately one-third of the Project’s start-up SC6.0 production capacity of ~500ktpa. Supply is expected to commence in 2024 and the Offtake Agreement is conditional upon Liontown commencing commercial production at the Kathleen Valley Lithium Project by no later than 1 December 2025.
The Offtake Agreement with Tesla is the second definitive agreement secured for Kathleen Valley following the foundational offtake agreement with LG Energy Solutions (refer ASX announcement, 2 May 2022). Together with the LG Energy Solutions agreement, this means that up to 60% of Liontown’s planned production is now covered by long-term agreements with high-quality customers.
The Company continues to receive very strong interest from a range of parties for the remaining third offtake which will, once completed, result in approximately 85% 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.
Liontown’s Managing Director and CEO Tony Ottaviano commented: “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.”
Source: Company Press Release