Australia-based battery materials company Liontown Resources has agreed to supply Tesla with spodumene concentrate, a source of lithium. Liontown will supply Tesla with up to 150,000 dry metric tons (DMT) of spodumene concentrate per year, produced at Liontown’s Kathleen Valley Lithium Project in Western Australia. Deliveries are expected to begin in 2024.

Pricing will be determined by a formula-based mechanism linked to market prices for lithium hydroxide monohydrate.

The deal with Tesla is the second offtake arrangement secured for Kathleen Valley, following an agreement with LG Energy Solutions. Between the two deals, more than half of Liontown’s planned production is now covered by long-term agreements.

According to Liontown, Kathleen Valley has “a world-class lithium deposit” that could eventually produce as much as 700 kilotons of spodumene concentrate per year.

Unlike some lithium extraction projects in the world, Kathleen Valley appears to be fairly environmentally friendly, and to enjoy the cooperation of the area’s indigenous people. Liontown says that operations will be powered by 60% renewable power at startup, and that the company has a strong working relationship with the traditional owners of the land, the Tjiwarl. Liontown has signed a Native Title Agreement with the Tjiwarl, which provides the framework for collaboration during the operation of the project.

Construction of the $340-million project is scheduled to commence by Q4 2022. Liontown says it is well-capitalized to forge ahead with development of Kathleen Valley, following a $323-million funding round in late 2021. The company is also evaluating the possibility of establishing a lithium hydroxide downstream processing facility in Western Australia, which is currently at the pre-feasibility study level.

Source: Green Car Congress