A $50 million funding injection from Australian taxpayers will support operations at Liontown Resources' Kathleen Valley lithium mine, but not its biggest shareholder - billionaire Gina Rinehart.
The Australian government announced Thursday a $50 million investment into Liontown (ASX : LTR) to accelerate operations and facilitate the transition to underground mining at the company's flagship 155 million tonne Kathleen Valley lithium project in Western Australia.
The investment, delivered through the taxpayer-funded National Reconstruction Fund Corporation (NRFC), represents a strategic move to bolster Australia's position in the global critical minerals supply chain under Prime Minister Anthony Albanese's "Future Made in Australia" initiative.
"Lithium is a critical mineral that is central to both decarbonisation efforts and the government's Future Made in Australia strategy," NRFC CEO David Gall said.
"Australia is well-positioned to be a competitive, long-term supplier of lithium to the rest of the world, and local lithium production is important to the nation's economic security and resilience."
The Kathleen Valley project boasts a multi-decade mine life and is designed to produce 500,000 tonnes of spodumene concentrate annually, with potential for future expansion. The facility serves major automotive and battery manufacturers, with Liontown maintaining supply agreements with industry giants Tesla, Ford, and LG Energy Solution.
The government investment forms part of Liontown's larger $266 million institutional cap raise, priced at $0.73 a share.
The miner plans to use the additional capital not only for operational expansion but also to strengthen its balance sheet amid the capital-intensive nature of mining operations.
NRFC's portfolio grows
The latest investment follows the NRFC's January commitment of $200 million to Arafura Rare Earths (ASX : ARU) for the development of its Nolans REE project in central Australia.
As Australia's $15 billion National Reconstruction Fund Corporation continues to prioritise investments in projects that enhance Australia's critical minerals supply chains, Liontown's biggest shareholder won't.
Billionaire Gina Rinehart's Hancock Prospecting remains Liontown's largest shareholder with an 18% stake, yet rumours are that Hancock will not participate in the current share placement as it would result in a dilution of its ownership position.
