Ford Motor Company Backs New $545 Million Lithium Mine in WA

A $545 million lithium mine in Western Australia has been approved for development after its owners, ASX-listed Liontown Resources, signed a deal today with US giant Ford Motor Company to supply the battery metal and support the project with a massive loan.

The green light for the Kathleen Valley mine, 37 miles north of Leinster in WA’s Goldfields, follows last year’s approval for the $1.9 billion Mt Holland lithium mine near Southern Cross and a refinery in Kwinana.

Today’s deal between Perth-based Liontown and Michigan-based Ford involves the annual supply of up to 150,000 dry metric tons of spodumene concentrate over five years, starting from 2024.

It tracks similar transactions with Elon Musk’s Tesla and South Korean battery manufacturer LG Energy Solution

As part of the deal, Ford will provide Liontown with a $300 million loan to fund the development of the project.

The company raised $450 million last year, so it’s well-funded to cover construction costs, despite hitting $72 million on initial estimates to $545 million.

Liontown Resources Director Tony Ottaviano speaks at the 2021 Diggers and Dealers Mining Forum in Kalgoorlie-Boulder.ABC Goldfields: Jarrod Lucas

‘Globally relevant’ lithium mine

In a statement to the ASX, Liontown chief executive Tony Ottaviano described the board’s final investment decision as just the beginning, saying the “central task lies ahead of us” to safely build and operate the mine. .

“The signing of our third and final fundamental off-take agreement is a momentous milestone for Liontown and the Kathleen Valley project, with approximately 90 percent of Kathleen Valley’s start-up capacity now under secure, binding, long-term off-take agreements,” he said.

“Our disciplined approach to our off-take strategy has enabled us to build a customer base of premium, globally significant customers in the electric vehicle supply chain, confirming Kathleen Valley’s status as a globally relevant lithium asset.

“In addition to the off-take, Ford’s $300 million financing facility, along with the capital raised last year, means we have received commitments for the funds needed to support Kathleen Valley’s full commercial development through initial production. .”

A map showing the location of a lithium mine in Western Australia.
A map showing the location of the planned lithium mine in Kathleen Valley, 37 miles north of Leinster.Provided: Liontown Resources

Ford’s vice president of electric vehicle industrialization, Lisa Drake, said it was an important deal for the automaker.

“Ford continues to work deeper into the battery supply chain to meet our goals of delivering more than two million electric vehicles to our customers annually by 2026,” she said.

WA lithium production is increasing

Liontown told the ASX it had already placed orders for 73 percent of the processing plant’s long-lead items, worth an estimated $83 million.

Mining is expected to begin early next year to build stocks of ore ahead of the commissioning phase.

A piece of mining machine used to crush ore.
Liontown Resources placed a $10 million order for a semi-autogenous grinding mill (SAG) in January.Provided: Liontown Resources

Kathleen Valley is expected to produce approximately 500,000 tons of spodumene concentrate per year, with plans to expand to 700,000 tons by 2029.

It will contribute to WA’s growing number of lithium mines in production, including the Greenbushes mine in the Southwest, the Pilgangoora and Wodgina mines in the Pilbara, Mt Cattlin at Ravensthorpe in the Great Southern, and the Mt Marion and Bald Hill mines . in the Goldfields.

Mt Holland, a 50:50 joint venture between Wesfarmers and SQM in Chile, is set to begin production in the second half of 2024.

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