PERTH (miningweekly.com) – Lithium developer Liontown Resources has inked a binding lithium spodumene concentrate offtake term sheet signed with South Korea-based LG Energy Solution.

Liontown on Wednesday told shareholders that the foundation agreement with LG underpinned the development of the A$473-million Kathleen Valley lithium project, in Western Australia.

LG will purchase 100 000 t of spodumene concentrate in the first year, increasing to 150 000 t/y over the remaining four years of the five-year offtake term, which is expected to start in 2024.

Pricing will be determined using a formula-based mechanism referencing market prices for lithium hydroxide monohydrate.

“The signing of this historic first offtake term sheet for Kathleen Valley represents a fantastic outcome for our shareholders and marks a very satisfying result for the Liontown board and team,” said MD and CEO Tony Ottaviano.

“We have been steadfast in our strategy to negotiate terms that we believe accurately reflect the significance of our position in the global lithium market, as well as the quality and location of our Kathleen Valley resource to ensure that we extract the best value for our shareholders.

“Not only is this offtake term sheet consistent with our strategy, it also represents a strong validation for the Tier-1 credentials of the Kathleen Valley project as one of the world’s premier new spodumene projects. Having a customer of the calibre and standing of LG endorse the project, by signing up to become a foundation customer, represents a significant vote of confidence in Kathleen Valley and in Liontown’s ambition to become a globally significant provider of battery materials for the clean energy market,” said Ottaviano.

“We are very pleased to have reached agreement with LG, a respected global leader in the lithium battery value chain, and look forward to working with them as long-term partners for many years to come.”

Liontown expects first production from Kathleen Valley in the second quarter of 2024 with initial base production of 2.5-million tonnes a year delivering 500 000 t/y of spodumene concentrate. Supply of spodumene concentrate under the offtake agreement represents approximately 30% ofyearly production after the first year of operation.