Wednesday, 29 June 2022 11:04

Lithium Supplier Liontown Signs Deal with Ford

Written by Maria Merano, Teslarati

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Liontown Resources Limited secured an agreement with Ford after signing lithium supply deals with Tesla and LG Energy Solutions (LGES).

Australia-based Liontown describes itself as an emerging Tier 1 battery minerals producer. 


As per the agreement, Liontown will supply up to 150,000 dry metric tonnes (DMT) per annum of spodumene concentrate, or lithium ore, to Ford for lithium-ion battery production. The deal is expected to commence in 2024, with 75,000 DMT in its first year, 125,000 DMT in its second year, and 150,000 DMT in its third to fifth years. 


Liontown’s spodumene concentrate will come from its Kathleen Valley Lithium Project in Western Australia. The agreement also said Ford would provide a $207 million debt facility to Liontown through one of the automaker’s subsidiaries. The proceeds will partially fund the development costs of Kathleen Valley. 


Ford’s agreement with Liontown is the third and final foundation offtake the company required to start developing Kathleen Valley, after the deals with Tesla and LGES.


In May, Liontown signed an agreement with Tesla battery supplier LGES for 150,000 DMT per annum of spodumene concentrate. LGES plans to produce Tesla’s 4680 battery cells and increase the production of its 2170 batteries.


Tesla signed its five-year lithium supply deal with Liontown earlier this year. Tesla and Lionwtown’s deal is expected to commence in 2024, similar to Ford’s agreement. Tesla agreed to purchase 100,000 DMT of lithium in the first year of its deal with Liontown and increase the order by 150,000 DMT in the following years.


The Tesla-Liontown agreement is conditional, based on when the Australian company starts commercial production in Kathleen Valley.


Liontown’s board decided to proceed with the development of Kathleen Valley, following its deal with Ford. Kathleen Valley’s first production of spodumene concentrate is scheduled for Q2 2024. 


We thank Teslarati for reprint permission.