Australia's Liontown Meets Lithium Output Target Amid Market Challenges

Australian lithium producer Liontown Resources has achieved a significant milestone by producing its first spodumene concentrate from the Kathleen Valley project, meeting its mid-2024 goal despite earlier financial difficulties. The first shipment of spodumene concentrate is scheduled for later in the current quarter (July-September), according to an announcement on July 31.

Liontown recently secured a short-term 10-month offtake agreement with Beijing Sinomine International Trade. Additionally, long-term contracts with major auto manufacturers and battery producers such as Tesla, LG Energy Solution, and Ford are expected to commence as the Kathleen Valley project reaches full production capacity over the next year.

The Kathleen Valley project is ramping up to a capacity of 3 million tons per year, a target anticipated by the end of the first quarter of 2025. Liontown also plans to expand this capacity to 4 million tons per year. The company’s funding deal with LG Energy Solution will facilitate early works to "preserve" the expansion option with a timeline set for 2027.

This new supply of lithium from Liontown comes amid a market downturn with ongoing concerns about oversupply. Australian financial services firm Macquarie has projected a potential slowdown in the pace of Australian production growth due to unencouraging price conditions.

In a related development, US lithium producer Albemarle announced on July 31 a halt to the construction of train 3 at its Kemerton lithium conversion facility in Western Australia, citing "ongoing industry headwinds" as part of a comprehensive review of its cost and operating structure. Each train at the 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.

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