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Australia’s Liontown signs 5-year lithium supply deal with Tesla -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – A Tesla Motors logo is displayed on an electric vehicle model outside of a New York showroom. June 28, 2010. REUTERS/Shannon Stapleton/File photo

(Reuters) – Australia’s Liontown Resources announced Wednesday that it had signed a five year agreement with Tesla (NASDAQ) to supply lithium spodumene concentrate for the electric carmaker. This move has nearly doubled the shares of the lithium miner.

Tesla will purchase 100,000 DMT (dry metric tonnes) of concentrate the first year beginning in 2024. This number will increase to 150,000 DMT each year over the following years.

The price of lithium has risen in recent years as suppliers struggle to keep up with demand from automakers who are moving towards electric cars. Prices are eight times more than at the beginning of 2021.

Liontown will provide lithium to its Kathleen Valley Lithium Project in Western Australia. This project is scheduled for commercial production in 2025. About a third the annual capacity of the project will be supplied to Tesla.

Liontown already has an agreement for lithium supplies with South Korea’s LG Chem.

Liontown shares rose as high as 19.8%, to A$1.665. This is their largest intraday jump since Sept. 13, 20,21.

($1 = 1.3986 Australian dollars)

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