LG Energy Solution invests $250m in Liontown Resources’ Kathleen Valley project to boost lithium supply

LG Energy Solution (KRX: 373220) and Liontown Resources Limited have entered into a transformative strategic partnership, reinforcing their commitment to the global lithium industry. The agreement, which includes a convertible note subscription and an extended offtake arrangement, marks a significant advancement in securing a stable supply of high-quality lithium spodumene from Liontown’s Kathleen Valley project.

Under the terms of the agreement, LG Energy Solution will invest US$250 million (A$379 million) to bolster the production capabilities at Kathleen Valley, with production of lithium spodumene concentrate anticipated to commence by the end of July. This investment will support the establishment of an IRA-compliant lithium refinery, enhancing the production of battery-grade lithium chemicals.

The strategic partnership was formalized in a ceremony at LG Energy Solution headquarters in Seoul, Korea, and is set to extend LG Energy Solution’s initial five-year offtake agreement with Liontown by an additional ten years, bringing the total to 15 years. This extension underscores the long-term commitment of both companies to the lithium market, with plans to supply a total of 2.45Mt of spodumene concentrate over the duration of the agreement.

David Kim, CEO of LG Energy Solution, highlighted the importance of the partnership: “By partnering with strong players like Liontown, we will continue to secure a stable supply of IRA-compliant critical minerals, fulfilling our efforts to provide competitive power solutions for electrification.”

Tim Goyder, Chairman of Liontown Resources, echoed this sentiment, stating, “This partnership and investment is consistent with our downstream refining strategy to capture the value of vertical integration and deliver substantial value to our shareholders and key stakeholders over the long term.”

This partnership not only aims to secure a reliable supply of lithium for LG Energy Solution but also positions Liontown Resources as a key player in the supply of battery minerals critical to the transition to a low-carbon future.

The strategic alliance between LG Energy Solution and Liontown Resources represents a significant step towards vertical integration in the lithium sector. This partnership leverages both companies’ strengths, potentially setting a new standard in the industry for sustainable and efficient lithium production and refining.