The National Reconstruction Fund Corporation has made its second investment in Australia’s critical minerals sector, committing $50 million to Liontown Resources’ flagship Kathleen Valley lithium project in Western Australia.
The investment, announced on Thursday, forms part of a $365 million fully underwritten institutional placement to support the construction and scaleup of the Gina Rinehart-backed lithium operation.
It will also be used to bolster Liontown’s balance sheet, provide a “liquidity buffer” during a period of fluctuating lithium prices — which have surged hitting a low in June — and cover general corporate and transaction costs.
The Kathleen Valley project commenced production of spodumene concentrate mid-last year, with capacity to deliver up to 500,000 tonnes of the type of lithium ore per year over its multi-decade life.
The NRFC’s $50 million commitment positions the Corporation as a cornerstone investor in Liontown, alongside other institutional participants. Value-add in resources, as well as renewables and low emission technologies, are some of the seven priority areas for the fund.
NRFC chief executive David Gall said investment exemplifies the NRF’s purpose, saying it will “help expand Australia’s industrial capabilities in strategically important sectors and support the transition to net zero”.
“It will help to strengthen Australia’s position as a globally significant supplier of lithium, and support the development of new clean energy industries including battery manufacturing,” Mr Gall said.
Liontown managing director and chief executive Tony Ottaviano welcomed the NRF’s participation, which he said “represents a strong endorsement of the project’s strategic significance and long-term value”.
“It is also a recognition of the critical role that Liontown and the Kathleen Valley Project will play in supporting Australia’s transition to a net-zero future,” Mr Ottaviano said in an ASX release.
The NRF’s capital injection arrives at a crucial juncture for Liontown, enabling it to advance its transition to underground operations and ensuring stability amid volatile lithium markets, while aligning with NRF’s strategic mission to shore up Australia’s sovereign capabilities.
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