On Wednesday, Feb. 16, Australian lithium miner Liontown Sources announced the signing of a five-year agreement with global electric vehicle giant TSLA.US for the supply of spodumene concentrate. It is worth mentioning that after the announcement, Liontown's stock price soared by nearly 20%.
Under the agreement, Liontown will begin supplying spodumene concentrate to Tesla in 2024. Tesla will purchase 100,000 dry metric tons (DMT) of spodumene concentrate in the first year and increase it to 150,000 dry metric tons per year in subsequent years. Tesla's orders account for about one-third of the annual production capacity of the Kathleen Valley lithium project after it is put into operation.
The spodumene concentrate supplied to Tesla comes from the Kathleen Valley project. The project is scheduled to be commercially produced by 2025 and is expected to achieve a capacity of 500,000 sc6.0 tonnes per annum (grade 6%) in spodumene concentrate.
Liontown Sources is an Australian-listed lithium company with projects including the Kathleen Valley Lithium Mine, the Buldania Lithium Mine and the Moora Gold Mine.
The Kathleen Valley Lithium Project is located in one of the best mining areas in Western Australia and one of the highest grade underground lithium mines in the world. According to the Liontown website, the project's estimated, indicated and inferred Mineral Resources (MRE) amounts to 156 million tonnes at a Grade 1.4% Li2O, corresponding to a Li2O content of 2.14 million tonnes. Therefore, it can be seen how important Tesla's customer is to Liontown.
In recent years, with the rapid development of the new energy automobile industry, lithium prices have repeatedly reached new highs. According to data from Shanghai Nonferrous Metals Network, the price of battery-grade lithium carbonate and lithium hydroxide rose by 10,000 yuan in a single day on February 14. The average price of battery-grade lithium carbonate exceeded 400,000 / ton, and the spot quotation on December 16 was 418,000-426,000 yuan / ton, with an average price of 422,000 yuan / ton, so Tesla signed a five-year supply agreement with an Australian lithium miner.