The Liontown Resources Limited (ASX: LTR) share price is again on the rise today. This comes after the company's CEO weighed in on the future supply of lithium in the market.
At the time of writing, the lithium developer's shares are 3.68% higher at $1.69 apiece, having earlier reached as high as $1.75. They also gained 5.16% yesterday.
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What did Liontown's CEO say?
Investors are continuing to drive up the Liontown share price amid comments from the CEO this week.
In the Australian Financial Review on Wednesday, Liontown CEO Tony Ottaviano played down concerns over a lithium supply glut. Some analysts are forecasting an oversupply of spodumene concentrate which could put pressure on the future spot price of lithium.
However, Mr Ottaviano dismissed the outlook by analysts and noted the difficulties for smaller companies entering the lithium space. He said while many lithium players are promising spodumene concentrate production by next year, this is not possible if they have not significantly progressed in their operations.
On average, it takes a company between five to seven years to bring a mine from the exploration phase to production.
In addition, acquiring exploration permits and managing supply chains takes time which can further delay unlocking lithium deposits.
Liontown, on the other hand, has been advancing its wholly-owned Kathleen Valley project located in Western Australia's north-eastern Goldfields region.
A binding offtake agreement with premier global battery maker, LG Energy Solution was announced yesterday, which resulted in a surge in the Liontown share price. The deal will see the supply of up to 150,000 dry metric tonnes (DMT) per annum of spodumene concentrate from 2024.
To put this into perspective, the Kathleen Valley project is anticipated to have a start-up production capacity of 500,000 DMT. The deal represents almost one-third of the entire initial output. The Liontown share price soared on the announcement.
Construction at the mine is set to commence in the second quarter of 2022. Once completed, it would be one of Western Australia's largest lithium mines.
Liontown share price snapshot
It has been a sound 12 months for the Liontown share price, rising by more than 330% during that period.
The company's shares reached an all-time high of $1.995 in November, and have since moved in a sideways channel.
Liontown commands a market capitalisation of roughly $3.72 billion, with approximately 2.18 billion shares on issue.
