The Clean Energy Finance Corporation (CEFC) has announced a commitment of up to $110 million to support a lithium project. 

The funds have been pledged to help Liontown Resources through the final stages and ramp-up of its Kathleen Valley lithium project. 

The funding marks the CEFC's most substantial investment in the resources sector to date, aimed at backing the development of low carbon lithium spodumene production, a crucial component in the clean energy supply chain.

The funding forms part of a broader $550 million liquidity financing package assembled by a syndicate of leading Australian and international financial institutions, including the Commonwealth’s Export Finance Australia, Commonwealth Bank, National Australia Bank Limited, and Société Générale, with Export Finance Australia providing a $120 million loan facility.

Situated north of Kalgoorlie in Western Australia's Eastern Goldfields, the greenfield Kathleen Valley Lithium Project is set to produce approximately 500 kt of six per cent spodumene concentrate annually. 

This output places it among Australia's most significant lithium mines in terms of production capacity.

A highlight of the project is its design featuring a low carbon approach. 

This includes 46 MW of renewable energy generation and a 17 MW battery storage system, enabling it to operate on at least 60 per cent renewable energy from the outset.

Significant offtake agreements have been secured with global foundation customers, including Tesla, Ford Motor Company, and LG Energy Solution.

“Australia is a leader in the production of spodumene and this project represents a strategic shift in lithium production, promoting sustainability in the mining sector,” says Rob Wilson, CEFC Executive Director for WA and Resources.

“Liontown’s commitment to a 60 per cent renewable powered operation exemplifies the potential for our resource sector to reduce carbon intensity.”

Liontown Resources' Managing Director and CEO, Tony Ottaviano, has expressed gratitude for the CEFC's support, highlighting the project's importance in the global shift towards a net zero future and its alignment with ESG principles.

Australia, accounting for about half of the world's lithium supply, is set to play a crucial role in meeting the burgeoning demand for lithium, with the automotive sector projected to account for 87 per cent of all global lithium ion-battery demand by 2033. 

The CEFC has made several investments in the lithium sector, including $75 million in Pilbara Minerals' Pilgangoora Project. 

More details are available in the recent Liontown Resources ASX statement.