Lithium developer Liontown Resources and Tesla have reached an agreement to extend the termination date for its binding offtake term sheet. After signing the lithium supply agreement in February 2022, the companies worked to finalize negotiations.
It was revealed on Monday that Australia's Liontown Resources and Tesla had reached an agreement to extend the termination date for its binding offtake term sheet until June 6. The two companies signed a supply agreement in February and have since worked to finalize negotiations and sign detailed definitive agreements by the end of May.
The February 2022 agreement between Tesla and Liontown is for the supply of up to 150,000 dry metric tons per year of spodumene concentrate, which will be produced at Liontown's Kathleen Valley lithium project in Western Australia and is expected to start in 2024, representing approximately one-third of the project's start-up SC6.0 production capacity of ~500ktpa. Pricing will be determined by a “formula-based mechanism” based on market prices for lithium hydroxide monohydrate, the company said.
The deal with Tesla is the second purchase agreement the Australian lithium maker has struck this year, after signing a similar contract in January with South Korea's LG Chem, which supplies batteries to Tesla. “We now have two of the premier companies in the global lithium-ion battery and EV space signed up as foundational customers, marking a significant step towards realizing our ambition to become a globally significant provider of battery materials for the clean energy market,” chief executive and managing director Tony Ottaviano said in a statement.
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