Australia is one of the main regions for the supply of lithium, a key element necessary for batteries used in electric vehicles. There are several of lithium mines within its territory, among which the Kathleen Valley Lithium Project stands out; one of its main objectives being to operate outside the electricity grid using only solar and wind energy, that will in turn be stored in batteries for later use in the lithium extraction processes. Tesla, Ford and LG Energy Solutions have already signed contracts with the managers of this project to supply part of the lithium they will need for their EV batteries.
The Kathleen Valley Lithium Project will in fact become the largest off-grid capable power plant of any existing mining facility in Australia. Liontown Resources is the developer of the mine, while Zenith Energy is the company that will build and supply renewable energy to the project.
It will have an installed capacity of 95 MW, which will be coming from five 6-MW wind turbines (30 MW in total), 16 MW of photovoltaic solar panels and 17 MW/19 MWh of battery storage. To achieve all the indicated power, the autonomous off-grid installation is joined by a "dirty" energy source with a capacity of 27 MW that basically uses gas to function, in addition to another 5 MW that use diesel.
While the installation of fossil fuel generation systems is planned, the goal is for the project to operate in "engine off" mode most of the time, that is, diesel and gas engines off. Therefore, these last two are installations only intended as a backup for emergencies in case there are failures or breakdowns in the "clean", green energy part of the generation system.
Ford signed a lithium spodumene concentrate purchase agreement earlier this year and also provided a $300 million line of credit to finance the project. The quantity specified in the contract speaks of "up to 150,000 dry metric tons per year, for an initial period of five years from the start of commercial production". The spodumene concentrate will also be refined into lithium hydroxide, which will also be used in Ford's electric car batteries.
According to Ford's vice president of electric vehicle industrialization, Lisa Drake, "Ford continues to work to deepen the battery supply chain to meet our goals of delivering more than two million electric vehicles a year by 2026". This is one of the agreements in which the firm works to secure the necessary raw materials to support this end, "and meet our environmental, social and governance commitments," she added.
Separately, Tesla and LG Energy Solution have also agreed to purchase lithium spodumene concentrate from the Kathleen Valley Lithium Project. In total, the weight of material that these three companies agreed to extract annually from the lithium mining project is: Ford, with 150,000 tons; LGES with 150,000 tons and Tesla with 100,000 tons (the first year, increasing to 150,000 in subsequent years).
Together, these purchase agreements amount to approximately 90% of the project's initial lithium concentrate production capacity, which is approximately 500,000 tonnes per year. The road plan indicates that the mine will be in operation for more than 20 years and production of the spodumene concentrate is expected to start in the third quarter of 2024.
All images courtesy of Tesla Inc.
Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.