US automotive manufacturer Ford has revised its agreement with Liontown Resources, delaying and reducing its lithium purchases until at least 2029. This change comes as a slowdown in electric vehicle sales impacts one of Liontown’s key customers and lenders. Liontown Resources is an Australian company focused on the exploration and development of lithium deposits. The company is developing the Kathleen Valley mine in Western Australia.
Ford’s initial commitment was crucial to Liontown’s expansion, providing a $300 million loan and supply deal three years ago to facilitate the construction of the Kathleen Valley mine in WA. However, due to the cooling electric vehicle market in North America, Ford has halved its planned lithium purchases from Liontown to 256,250 tonnes. Deliveries have been postponed by at least two years from the original 2027 timeline.
Liontown, with Gina Rinehart as its largest shareholder, will now need to seek alternative buyers for its lithium in a market largely controlled by China. The repayment schedule for the $300 million loan from Ford has been extended by one year to September 2026.
Tony Ottaviano, Managing Director and CEO of Liontown, stated that the amended agreement offers the company greater flexibility to sell its lithium at potentially higher prices. He added that the deal improves near-term balance sheet liquidity and allows Liontown to explore spot sales and new strategic partnerships as the lithium market evolves.
