Liontown Achieves Lithium Production Milestone Amid Market Headwinds

Australian lithium producer Liontown Resources has successfully produced its first spodumene concentrate from the Kathleen Valley project, meeting its target for mid-2024 despite earlier financial challenges. The company announced on July 31 that the first shipment of spodumene concentrate is scheduled for later in this quarter (July-September).

Recently, Liontown entered into a short-term 10-month offtake agreement with Beijing Sinomine International Trade. Additionally, the company has secured long-term contracts with major automakers and battery manufacturers such as Tesla, LG Energy Solution, and Ford. These contracts are set to commence over the next year as the Kathleen Valley project increases to full production capacity.

The Kathleen Valley project is projected to reach a capacity of 3 million tons per year by the end of the first quarter of 2025, with plans to expand to 4 million tons annually. A funding agreement with LG Energy Solution will allow Liontown to begin early works, preserving the option for expansion by 2027.

Liontown’s new lithium supply comes at a time when the market is facing a downturn, with concerns about oversupply. Australian financial services firm Macquarie has forecasted a slowdown in the growth of Australian lithium production due to unfavorable price conditions.

In related news, US lithium producer Albemarle announced on July 31 that it is pausing the construction of train 3 at its Kemerton lithium conversion facility in Western Australia. This decision is part of a broader review of costs and operations, citing “ongoing industry headwinds.” Each train at the Kemerton facility has a processing capacity of 25,000 tons per year of lithium hydroxide. Albemarle will also place train 2 into care and maintenance while focusing on boosting production from train 1.

Australia’s federal resources minister, Madeleine King, commented on Albemarle’s decision, urging bipartisan support for the nation’s critical minerals and rare earths industry. She also called on political opposition parties to back Australia’s critical minerals production tax incentive to support local industry and jobs.