Liontown Resources Revises Ford Agreement to Boost Liquidity and Market Flexibility

Liontown Resources Ltd has amended its loan and spodumene supply agreements with Ford Motor Co., a strategic move designed to enhance liquidity and increase flexibility as production accelerates at its Kathleen Valley lithium project in Western Australia. The revised deal defers principal and interest payments due to Ford by 12 months, covering fiscal 2026, while keeping all other loan conditions unchanged.

The update also significantly reduces the remaining spodumene concentrate volumes committed to Ford from 2027 onwards — halved to 256,250 dry metric tons. Notably, there will be no deliveries in 2027 or 2028, giving Liontown more leeway to sell on the spot market or explore new strategic partnerships. Ford will also have the option to waive its take-or-pay commitments for these future volumes.

Following the announcement, Liontown’s shares surged 3.4% to A$1.065, their highest level since mid-June 2024, outperforming the S&P/ASX 200 index, which rose just 0.3%. The market reaction reflects investor confidence in the company’s financial resilience and operational strategy amid a volatile lithium market.

Liontown emphasized that the amendments strengthen its near-term liquidity as it ramps up output at Kathleen Valley, one of Australia’s most significant emerging lithium projects. The move comes just a week after the Perth-based miner said it was renegotiating pricing terms with Tesla, aiming to align long-term offtake agreements with evolving lithium benchmark prices.

By revising its deals with two major EV manufacturers, Liontown is positioning itself to capitalize on favorable market dynamics and secure greater exposure to fluctuating lithium prices. These strategic adjustments could enhance the company’s competitive standing in the global battery materials sector as demand for electric vehicles and lithium intensifies.