Ford executes binding offtake agreement with Liontown for up to 150 ktpa of spodumene concentrate
01 July 2022
Ford has executed a definitive binding full-form offtake agreement with Australia-based Liontown Resources for the supply of up to 150,000 dry metric tonnes (DMT) per annum of spodumene concentrate—a source of lithium essential in key EV battery chemistries. The spodumene concentrate will come from Liontown’s flagship 100%-owned Kathleen Valley Lithium Project in Western Australia for five years.
Ford continues working to source more deeply into the battery supply chain to meet our goals of delivering more than 2 million EVs annually for our customers by 2026. This is one of several agreements we’re working on to help us secure raw materials to support our plan to deliver EVs for customers around the world and meet our environmental, social and governance commitments.—Ford’s vice president of EV Industrialization, Lisa Drake
The agreement represents Liontown’s third and final foundational offtake required to underpin the development of Kathleen Valley— marking the culmination of the disciplined execution of its offtake strategy.
Together with the previously announced binding full-form offtake agreements with Tesla (6 June 2022) and LG Energy Solution (2 May 2022), Liontown’s total offtake commitments now stand at up to 450,000 DMT per annum of spodumene concentrate, representing approximately 90% of Kathleen Valley’s start-up SC6.0 production capacity of ~500 ktpa.
The remaining production from Kathleen Valley is intended to be retained for spot volume sales and/or discrete offtake agreements.
Supply to Ford is expected to commence in 2024, with volumes of 75,000 DMT of spodumene concentrate in year one of operations, increasing to 125,000 DMT in year two and 150,000 DMT for years three to five of the initial five-year term.
Under a separate funding facility, a Ford subsidiary will provide a A$300 million debt facility to Liontown, with the proceeds to be used towards partially funding the development costs of Kathleen Valley. The funding facility, together with the A$463 million raised by Liontown in December 2021, means that Liontown has now secured commitments for the required funds to support the full development of the project through to first production.
The finalization of debt funding, along with completion of foundational offtake arrangements, paves the way for a Final Investment Decision for the project.
Kathleen Valley is a new, globally significant, lithium development project located 680km north-east of Perth in Western Australia’s premier mining district. Underpinned by a world-class lithium deposit with a Mineral Resource Estimate of 156Mt at 1.4% Li2O and 130ppm Ta2O5, Kathleen Valley is forecast initially to produce ~500 ktpa of SC6.0 spodumene concentrate expanding to ~700 ktpa. The Project also has an integrated and value-adding ESG focus with greater than 60% renewable power supply planned at start-up and a strong working relationship with the Traditional Owners of the land (the Tjiwarl).
Mining will predominately be underground, allowing direct access to higher grade mineralization while minimizing waste and the environmental footprint of the project, Liontown says.
Mined ore will be processed through a Whole of Ore Flotation circuit which will provide an estimated recovery rate of 78% across the mine life and an estimated site recovery for tantalum concentrate of 42%.