Liontown Resources Wants To Renegotiate Prior Deals With Ford

Back in June 2022, Ford signed an agreement with the Australian mining company known as Liontown Resources, which was one of several deals inked as the automaker planned to vastly ramp up its EV production in the ensuing years. That deal was slated to supply Ford with up to 150,000 dry metric tons of spodumene concentrate annually – a source of lithium – starting in 2024 and running for five years after that.

Things have changed quite a bit since then, with EV demand proving to be weaker than expected – prompting Ford to scale back its plans. Now, Liontown Resources is looking to renegotiate its deal with The Blue Oval, according to Reuters. The company just revealed that it’s in talks with Ford Motor Company as it’s aiming to revise its offtake and loan agreements with the company, which could impact purchase commitments for future deliveries, contract quantities, and the re-profiling of debt agreements.

The move comes as Liontown Resources just signed a new deal with Ford rival Tesla, which opens it up to potential changes in terms of its long-term offtake agreement pricing mechanisms. The mining outfit is looking to move away from lithium hydroxide indices and toward spodumene concentrate, which is part of its broader goal of being exposed to a “basket of pricing references across main lithium products such as lithium hydroxide, lithium carbonate, and spodumene concentrate.”

Liontown did clarify that there won’t be any changes to the remaining volumes contained within its agreement with Ford, which ends in 2029. Regardless, the entire industry is in a bit of a flux at the moment, amid soft demand for EVs prompting Ford and its rivals to dramatically cut back plans to build those types of vehicles, as well as batteries. In fact, just this past May, another company Ford signed a raw materials deal with – Albemarle Corp – paused its plans to build what would have become the largest lithium refinery in the U.S.