Liontown Resources (ASX:LTR)
has signed a binding sales agreement with electric vehicle manufacturer Tesla for the supply of lithium spodumene concentrate.
The battery materials company said the agreement is set supply up to 150,000 dry metric tonnes per annum of spodumene concentrate at Liontown’s Kathleen Valley Lithium project in Western Australia. The initial 5 year term is expected to commence in 2024.
Tesla will purchase 100,000 dry metric tonnes in the first year, increasing to 150,000 per year in subsequent years.
Liontown and Tesla will work together to complete the negotiation by May 30 this year. The agreement is conditional upon Liontown commencing commercial production at the Kathleen Valley lithium project by 2025.
“Securing our second offtake sales agreement is another fantastic milestone for Liontown towards the development of the Kathleen Valley Lithium Project, and we are absolutely delighted to have signed this agreement with leading EV manufacturer, Tesla," said chief executive officer Tony Ottaviano.
“Tesla is a global leader and innovator in electric vehicles and having it sign up to become a significant customer is a tremendous achievement and another huge vote of confidence in the quality of the Kathleen Valley Project."
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."
Shares in Liontown Resources (ASX:LTR)
are trading 16.2 per cent higher at $1.62.