Liontown Resources said on Wednesday it signed a five-year agreement with Tesla Inc to supply lithium spodumene concentrate to the automaker.
Tesla will purchase 100,000 dry metric tonnes (DMT) of the concentrate during the first year from 2024, increasing to 150,000 DMT annually in subsequent years.
Lithium prices have increased in the past few years, with suppliers scrambling to satisfy demand as automakers lean towards electric vehicles. The prices are about eight times more than they were at the beginning of 2021.
Liontown will provide lithium from its flagship Kathleen Valley Lithium project in Australia that is expected to start commercial production by 2025. The supply to Tesla will represent about a third of the project’s annual production capacity.
