Battery manufacturer LG Energy Solution (LGES) said it had strengthened its strategic partnership with Australian lithium miner Liontown Resources (Liontown) after the two companies signed three separate agreements this week.

LGES said the two companies signed a convertible note subscription agreement, an extended offtake agreement for the supply of high quality lithium spodumene from Liontown’s Kathleen Valley project in Western Australia and a downstream collaboration agreement to explore the feasibility of establishing a lithium refinery which it says “has the potential for long-term value creation”.

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LGES said in a statement its partnership with Liontown reflected “a mutual commitment to advancing sustainable and stable lithium solutions globally and underscores the companies’ shared commitment to innovation and value creation”.

LGES said the agreements included:

• A 10 year extension to the existing five year lithium offtake agreement to 15 years in total. The extension would provide an aggregate of 700,000 tons of spodumene concentrate in the first five years of the contract and 1.5m tons between years six and 15. The agreement also includes a provision for Liontown to make available an optional 250,000 tons of spodumene concentrate in the first 10 years of the contract, lifting the total off-take agreement to 2.45m tons over the 15year period.

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• A downstream collaboration agreement to commence feasibility studies to establish an IRA compliant (US Inflation Reduction Act) lithium refinery, aimed at processing spodumene from Kathleen Valley into battery-grade lithium chemicals.

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• LGES to invest US$250m through convertible notes to help fund the production ramp-up of Liontown’s Kathleen Valley Project in Western Australia which is expected to begin production of lithium spodumene concentrate by the end of July.

LG Energy Solution chief executive officer, David Kim, said in a statement: “The agreement represents another significant step in our value chain investment strategy aimed at enhancing its resilience to market uncertainties. By partnering with strong players like Liontown, we will continue to secure stable supply of IRA compliant critical minerals, fulfilling our efforts to provide competitive power solutions for electrification.”

Liontown Resources’ chairman, Tim Goyder, said: “Liontown is very pleased to formalise 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.”