Project finance

Liontown Resources, a battery minerals producer, secured a $250 million investment and a 10-year offtake extension from foundational partner LG Energy Solution, a manufacturer of lithium-ion batteries.

The companies have executed agreements for five-year $250 million convertible notes, a 10-year offtake extension, and a downstream collaboration agreement to investigate the feasibility of establishing an Inflation Reduction Act (IRA)-compliant conversion plant to process LG Energy Solution offtake material and potential additional tons from any future 4 Mtpa expansion.

“These developments pave the way for Liontown to pursue our long-term strategy to be a globally significant provider of battery minerals as the world transitions to a low-carbon future. We believe this partnership and investment will deliver substantial value to our stakeholders and position us at the forefront of the lithium industry.” said Liontown’s Managing Director and CEO, Tony Ottaviano.

The funding will enable works in the Kathleen Valley project to preserve the 4Mtpa expansion option in 2027 and support 3Mtpa production. This funding lifts Liontown’s total cash balance to approximately A$501 million (~$334 million)

“Liontown is very pleased to formalize 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,” said Tim Goyder, Chairman of Liontown Resources.

In 2023, LG Energy Solution raised $1 billion through its inaugural global green bonds to expedite investments in its global battery production network.

According to Mercom’s Q1 2024 Funding and M&A report for Storage & Smart Grid, announced debt and public market financing in the energy storage sector totaled $10.5 billion in six deals, an increase of 855% year-over-year compared to Q1 2023 when $1.1 billion was raised in eight deals.