Liontown Resources has gained the potential for new commercial opportunities, after reaching agreement with Ford Motor Company to revise the spodumene concentrate offtake targets from its Kathleen Valley lithium operation.
The 512,500 dry metric tonnes (dmt) of spodumene concentrate to be delivered to Ford has been reduced to 256,250dmt, with no volumes to be delivered in the calendar years of 2027 and 2028.
Importantly, the change enables Liontown to sell surplus production via spot sales or to new customers.
According to Liontown managing director and chief executive officer (CEO) Tony Ottaviano, the original 2022 agreement was instrumental in financing and developing the Kathleen Valley operations.
“With production now underway, these amendments mark the next phase of our relationship,” he said.
The amendments will also include an adjustment to the debt facility agreement, with the first principal and interest payment due to Ford moved from 30 September 2025 to 30 September 2026.
“For Liontown, this agreement provides improved near-term balance sheet liquidity, retaining our debt facility with Ford, while giving (us) the strategic flexibility to sell greater volumes of spodumene concentrate via spot sales or to new strategic customers as the lithium market continues to evolve.”
Liontown said the amendments provide Ford with a wider range of options over the reduced volumes and that it can elect to be released from its take-or-pay obligations over all the remaining volume.
The deal amendments come after the recent release of Liontown’s 2024–25 financial year (FY25) results, where the company generated $298 million of revenue and underlying EBITDA of $55 million.
Ottaviano described FY26 as a transition year or a “tale of two halves”, with elevated unit costs as the company runs dual open pit and underground operations, and processed OSP (material containing between 10 per cent and 40 per cent host rock contaminant) material in the first half.
The deferral of the principal and interest payments to next year ensures Liontown has no large debt outflow during this transitional period.
The company’s full-year financial results for 2024–25 (FY25) show it produced 294,521 dry metric tonnes of lithium concentrate at an average grade of 5.2 per cent lithium oxide. It sold 16 parcels of the material for a total of 283,443 dry metric tonnes, and $298 million in revenue.
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