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 facing financial challenges earlier this year. The company announced on July 31 that the first shipment of spodumene concentrate is planned for later in the current quarter (July-September).

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

The Kathleen Valley project is expected 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 per year. A funding deal with LG Energy Solution will enable Liontown to initiate early works to "preserve" the option for expansion by 2027.

The new lithium supply from Liontown comes at a time when the market is experiencing a slump and concerns about oversupply persist. Australian financial services firm Macquarie has predicted a slowdown in the growth of Australian lithium production due to unappealing price conditions.

In related news, US lithium producer Albemarle announced on July 31 that it is halting the construction of train 3 at its Kemerton lithium conversion facility in Western Australia. This decision is part of a comprehensive review of its 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 increasing production from train 1.

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