CEFC confirms commitment to Kathleen Valley lithium project

The Clean Energy Finance Corporation (CEFC) has announced a commitment of up to $110 million to provide liquidity to Liontown Resources through the completion and ramp-up of its Kathleen Valley lithium project. The CEFC investment — its largest in the resources sector — will back the development of low-carbon lithium spodumene production, a critical input to the clean energy supply chain.

The CEFC commitment is a part of a $550 million liquidity financing package from a syndicate of Australian and international financial institutions including the Commonwealth’s Export Finance Australia, Commonwealth Bank, National Australia Bank Limited and Société Générale. Australia’s export credit agency, Export Finance Australia, is also part of the syndicate and is providing a $120 million loan facility to the project.

Located north of Kalgoorlie in the Eastern Goldfields of Western Australia, the greenfield Kathleen Valley Lithium Project is forecast to produce about 500 kt of 6% spodumene concentrate annually, placing it among the largest lithium mines for output in Australia.

Design of the underground mine features a low carbon approach, including 46 MW of renewable energy generation and a 17 MW battery, allowing it to be powered by at least 60% renewable energy from startup.

The project has secured substantial offtake agreements with three global foundation customers: Tesla, the Ford Motor Company and LG Energy Solution.

“Australia has an abundance of critical minerals and is already the world’s largest producer of spodumene,” said CEFC Executive Director for WA and Resources Rob Wilson. “This important project has the potential to further shift the dynamics of lithium production in Australia while promoting leading sustainability practices in the mining sector.

“Liontown has committed to building a mining operation for the future, with a 60% renewable power and a biofuel-ready mine and transport fleet. Its substantial investments in renewable energy and low-carbon mining and processing demonstrate the potential to reduce the carbon intensity of our resource sector, with Australia capturing a greater proportion of the lithium value chain.”

Liontown Resources Managing Director and Chief Executive Officer Tony Ottaviano said: “We greatly appreciate the support provided by the Australian Government’s Clean Energy Finance Corporation. Our world-class Kathleen Valley Lithium Project is on the cusp of production, and support from the government’s green bank will secure the final steps of construction and ramp-up, powering Kathleen Valley towards production.

“Kathleen Valley will produce a battery material product essential for the global transition to a net zero future with a low carbon footprint. As a growing company who has put ESG at the forefront of our decision-making, the support of CEFC is a further validation of our credentials.”

Australia accounts for approximately half the world’s lithium supply, with hard rock mining of spodumene — the dominant method of extraction in Australia — providing the primary raw material for batteries.

Image credit: Liontown Resources.