Liontown, lithium producer, and the National Reconstruction Fund Corporation, Australia’s state investment vehicle, have agreed an A$50 million ($32.6 million) equity investment to support ramp-up and the transition to underground mining at the Kathleen Valley project in Western Australia. The funding is part of a fully underwritten A$266 million ($173.5 million) placement priced at A$0.73 ($0.48) per share; trading in Liontown shares was halted after last changing hands at A$0.845 ($0.55).
What the government money does
NRFC said lithium is central to its “Future Made in Australia” strategy and confirmed this is direct equity from its A$15 billion ($9.78 billion) mandate. Proceeds will bolster working capital through ramp-up, advance early works for underground, and strengthen the balance sheet in a weak price environment. The government move follows a January NRFC commitment of A$200 million ($130.5 million) to Arafura Rare Earths’ Nolans project, signalling an appetite for equity alongside earlier debt tools.
Project status, volumes and customers
Kathleen Valley is designed for 2.8 Mtpa initially, producing ~500,000 t/y of spodumene concentrate, with a planned Year-6 expansion to 4 Mtpa (~700,000 t/y). Liontown shipped its first cargo in late 2024 and has long-term offtakes with LG Energy Solution (up to 150,000 t/y), Tesla (ramping from 100,000 t in Year 1 to 150,000 t/y thereafter) and Ford (up to 150,000 t/y over five years). A short-term agreement covered early ramp-up tonnes in 2024. Liontown had not declared commercial production at the plant as of the June quarter but has continued shipping against specifications.
Ownership dynamics and placement optics
Reuters reported the raise is part of a broader liquidity plan as prices stay subdued; media also indicate Hancock Prospecting, Liontown’s largest shareholder (about 18–20%), is not participating and will be diluted. After coverage questioning Hancock’s stance, Liontown’s chief executive publicly retracted comments about the investor’s strategy. The company later disclosed a two-tranche structure and an accompanying non-underwritten share purchase plan of up to A$20 million ($13.0 million).
Market context and pricing
Battery-grade lithium carbonate CIF China/Japan/Korea hovered around $8.7–$9.2/kg this week, while spot SC6 spodumene CIF China was quoted near $750–$785/t—higher than early-year lows but well below 2022 peaks. Price stabilization reflects supply curtailments and firmer EV sales in China, yet margins remain tight for new projects. In this backdrop, policy capital such as NRFC equity can de-risk commissioning and the open-pit-to-underground transition.
Company Background and Market Context
Liontown operates the 100%-owned Kathleen Valley mine in WA’s northern Goldfields and is positioning as a long-life spodumene supplier into North American, European and Asian supply chains. Offtake coverage across LGES, Tesla and Ford underpins a large portion of start-up volumes. The project’s staged expansion and underground plan are intended to improve ore flexibility and grade consistency. The latest capital raise lifts liquidity and reduces financing risk through ramp-up.
Lithium is a core input for EV and stationary-storage batteries. After an 80%+ downswing from 2022 highs, prices firmed in mid-2025 on mine curtailments and inventory drawdowns, but remain sensitive to Chinese demand and supply responses from Australia and Africa. For spodumene producers, contract structures and downstream conversions heavily influence realized revenue and cash flow.
