The Liontown Resources Ltd (ASX: LTR) share price is under pressure on Tuesday.
In morning trade, the lithium developer's shares are down 5.5% to $1.42.
Why is the Liontown share price falling?
The Liontown share price is falling today after weakness in the lithium industry offset the release of a positive announcement.
According to the release, Liontown has executed a binding power purchase agreement with Zenith Energy for the supply of electricity to the Kathleen Valley Lithium Project in Western Australia for a period of 15 years.
The release notes that Zenith Energy has progressed the planning, engineering, and design works for the 95MW Hybrid Power Station at Kathleen Valley. This includes the order of long lead items such as the wind turbines.
Impressively, with 46MW of emissions free power generation capacity, the 95MW hybrid power station is expected to be one of the largest off-grid wind-solar-battery storage renewable energy facilities in the mining industry in Australia.
Another positive is that Liontown has secured approval for a $25 million guarantee facility from Export Finance Australia as part of the security package under the power purchase agreement. This reflects the project being identified as a critical minerals project under Austrade's Critical Minerals Prospectus.
'Important milestone'
Liontown's CEO, Tony Ottaviano, was pleased with the news and labelled it a important milestone. He said:
Finalising the Power Purchase Agreement marks another important milestone for Liontown and the development of Kathleen Valley, paving the way for the construction of one of the largest off-grid wind-solar-battery storage facilities of its kind in the Australian resource sector. This reflects our unwavering commitment to delivering on our ESG credentials and establishing industry-leading carbon emissions from the outset.
Zenith Energy's commitment to deliver a high-capacity hybrid power solution includes incentives to produce renewable power over thermal power and, together with a renewable energy guarantee, sets us up to meet our renewable energy target of 60 per cent at start up. Securing the $25 million guarantee from Export Finance Australia assists to reinforce Liontown's position as a new globally significant producer and exporter of lithium integral to the transition to a low-carbon future.
