Liontown snares Western alliance solution to funding shortfall

afr.com:

Kalgoorlie | Liontown Resources has won backing from a coalition of government finance agencies in Australia, South Korea and the US to bridge a $300 million funding shortfall for its flagship lithium project in Western Australia.

The breakthrough secures the funds needed to complete the $895 million Kathleen Valley project against a background of rising costs in the WA mining sector and lithium market jitters.

Tony Ottaviano pictured at Kathleen Valley on Sunday. Evan Collis

Liontown also announced on Monday that it had joined forces with Japan’s Sumitomo Corporation to study the feasibility of building a lithium sulphate plant in WA that would supply a finishing plant in Japan producing lithium hydroxide.

The funding option, although not finalised, gets Liontown closer to its 2024 production target for Kathleen Valley after it last week unveiled plans to start shipping unprocessed lithium to realise some cash.

Export Finance Australia, the Korea Trade Insurance Corporation (K-Sure) and the Export-Import Bank of the United States (EXIM) have issued individual letters of support, underlining the strategic importance Western nations have placed on reducing their reliance on China for battery materials.

Liontown has not ruled out an alternative funding deal, and has also been in talks with customers and commercial banks.

The Tony Ottaviano-led lithium hopeful has acknowledged for months that it faced a funding shortfall of about $300 million in building Kathleen Valley. Mr Ottaviano told The Financial Review Mining Summit in Perth in May that Liontown had “no shortage of interest from commercial banks” and that at least 12 were briefed.

It aims to be producing spodumene concentrate by mid-2024, with most of the output over