Australia's green bank has made its biggest investment in the resources sector with a commitment of up to $110 million for the nation's next lithium mine.
The Clean Energy Finance Corporation (CEFC) on Wednesday announced the landmark deal to provide Liontown Resources with enough cash to complete and ramp up its Kathleen Valley lithium project in Western Australia.
The Liontown commitment is part of a $550 million liquidity financing package from a syndicate including Export Finance Australia, Commonwealth Bank, National Australia Bank and Societe Generale.
With offtake deals already in place with Tesla, Ford Motor Company and LG Energy Solution, the federal corporation said the investment would back the development of a critical low-carbon source for the clean energy supply chain.
"This important project has the potential to further shift the dynamics of lithium production in Australia while promoting leading sustainability practices in the mining sector," CEFC's executive director for WA and resources Rob Wilson said.
Located north of Kalgoorlie in the Goldfields region, the underground mine includes 46MW of renewable energy generation and a 17MW battery, allowing it to be powered by at least 60 per cent renewable energy from day one.
Liontown chief executive Tony Ottaviano said the project was "on the cusp of production", with support from the green bank securing the final steps.
Mr Ottaviano said the financing package was a further validation of the company's sustainability credentials.
"Kathleen Valley will produce a battery material product essential for the global transition to a net-zero future with a low-carbon footprint," he said.
Shares in Liontown surged 10.6 per cent or 14 cents to $1.46 in afternoon trade on fresh capital to get one of the world's largest and highest-grade hard rock lithium deposits ready for production.
US-based chemicals giant Albemarle, already one of Australia's biggest lithium investors, walked away from a $6.6 billion takeover of Liontown six months ago as the battery mineral slumped more than 80 per cent.
Australia's green bank was also an early investor in the nation's biggest lithium success story Pilbara Minerals, which has since repaid the capital.
"Lithium is one of several key minerals that will underpin the global energy transition, and is becoming a major export earner for Australia," Mr Wilson said.
Australia accounts for half the world’s lithium supply, with hard rock mining of spodumene providing raw material for batteries, although China retains a stranglehold on factory-ready materials.
