Liontown Resources has awarded an A$1bn ($644m) contract to mining contractor Byrnecut Australia to undertake underground mining services at the Kathleen Valley Lithium Project located 680km north-east of Perth, Western Australia.

Under the four-year contract, Byrnecut will provide a full suite of mining services for underground operations.

These services are expected to support the initial plant throughput capacity of three million tonnes a year (mtpa).

Liontown managing director and CEO Tony Ottaviano said: “Our collaboration with Byrnecut has already delivered value in the form of the updated ‘one mine, two orebodies’ mine plan, which was optimised as an outcome of the tender evaluation process.”

More than A$125m will be invested by Byrnecut to procure new plant and equipment to ensure delivery of underground mining services at the Kathleen Valley project.

The full contract value includes operating costs and early enabling works for the proposed 4mtpa expansion of the underground mine.

Ottaviano said: “At around A$1bn this is the largest contract to be awarded by Liontown and is reflective of operational requirements, external factors and the four-year duration.”

The Kathleen Valley high-grade lithium-tantalum project is estimated to hold mineral resources of 156mt at 1.4% Li₂O and 130ppm Ta₂O₅.

Liontown has signed deals for lithium supply from the Kathleen Valley mine to Tesla, LG Energy Solutions and Ford.

The Kathleen Valley project is scheduled to be commissioned by mid-2024.