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LG Energy Solution and Liontown Resources agree on long-term strategic partnership, securing lithium supply chain and future growth opportunities

SEOUL, July 2, 2024- LG Energy Solution (KRX: 373220) and Liontown Resources Limited (Liontown) today entered into a strategic partnership aimed at fortifying their long-term collaboration in the global lithium sector.

The companies signed a convertible note subscription agreement, an extended offtake agreement for the supply of high-quality lithium spodumene from Liontown’s Kathleen Valley project, and a downstream collaboration agreement to explore the feasibility of establishing a lithium refinery which has the potential for long-term value creation.

The partnership between LG Energy Solution and Liontown signifies a mutual commitment to advancing sustainable and stable lithium solutions globally and underscores the companies’ shared commitment to innovation and value creation.

The agreement will be formalised at a ceremony scheduled to take place on July 4th at LG Energy Solution headquarters in Seoul, Korea.

Key terms of the Strategic Partnership: [1]

  • Liontown extends LG Energy Solution’s existing 5-year offtake agreement by an additional 10 years (15 years total). The extension will provide 700kt of spodumene concentrate over the first 5 years and 1,500kt spodumene concentrate over years 6 to 15 (in aggregate).  This extension also includes a commitment to make up to 250kt spodumene concentrate available over the first 10 years (2.45Mt in total);
  • Downstream collaboration agreement to commence feasibility studies to establish an IRA-compliant lithium refinery, aimed at processing spodumene from Kathleen Valley into battery-grade lithium chemicals[2];
  • LG Energy Solution will invest US$250 million (A$379 million[3]) through Convertible Notes. The funding from LG Energy Solution will underpin the production ramp-up of Liontown’s world-class Kathleen Valley Project in Western Australia. First production of lithium spodumene concentration from Kathleen Valley is anticipated by the end of July.

LG Energy Solution’s Chief Executive Officer, David Kim, said:

 “The agreement represents another significant step in our value chain investment strategy aimed at enhancing its resilience to market uncertainties.

By partnering with strong players like Liontown, we will continue to secure stable supply of IRA-compliant critical minerals, fulfilling our efforts to provide competitive power solutions for electrification.”

Liontown Resources’ Chairman, Tim Goyder, said:

“Liontown is very pleased to formalise this strategic partnership with LG Energy Solution, one of the world’s leading battery producers, marking a significant milestone in our journey towards becoming a globally significant supplier of battery minerals as the world transitions to a low-carbon future.

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 announcement has been approved for release by the Board of Directors of Liontown Resources Limited]

[1] For further information on the terms of the strategic partnership, please refer to Liontown’s ASX Announcement

[2] Subject to separate investment decisions to approve execution of the refinery and Kathleen Valley 4 Mtpa expansion

[3] Notes are denominated in US$, A$ equivalent face value at 0.66 exchange rate