Tesla Enters 5-Year Deal With Australian Lithium Supplier Liontown Resources
By Sam Boughedda
Investing.com — Liontown Resources Ltd (ASX: LTR ) announced Wednesday that it has a deal with Tesla Inc (NASDAQ: TSLA ) to supply lithium spodumene concentrate, news that sent its stock up 18% during the Australia session.
The material will come from Liontown's new A$473 million ($337 million) Kathleen Valley Lithium Project in Western Australia.
The deal is for an initial five years and is set to begin in 2024.
Tesla will purchase 100,000 dry metric tonnes in the first year, increasing to 150,000 per year in subsequent years.
Liontown said major construction work at the project is scheduled to begin in the fourth quarter 2022.
While no financial details were disclosed, Liontown said pricing was determined using a formula-based mechanism referencing market prices for lithium hydroxide monohydrate.
Liontown has now contracted over half of its anticipated production from Kathleen Valley during the first five years of operation, while it is continuing negotiations with other potential customers for the remaining output.
Tesla shares are down 1.29% Wednesday.
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