The Western Australian government has welcomed the launch of Liontown Resources’ Kathleen Valley lithium project, hailing it as a milestone for the nation’s critical minerals sector and the world’s first dedicated underground lithium mine.

Located in the northern goldfields, the A$951-million project was officially opened on Thursday, with Western Australian Mines and Petroleum Minister David Michael attending the ceremony. The operation is backed by offtake deals with major battery and electric vehicle manufacturers, including Tesla, Ford, LG Energy Solution and Beijing Sinomine.

"I would like to congratulate Liontown on opening the landmark Kathleen Valley lithium project, which is attracting skilled workers and strengthening local development," Michael said.

Despite a sustained downturn in lithium prices, the state government is maintaining support for the sector, providing Liontown with a A$15-million interest-free loan through its A$150-million Lithium Industry Support Programme. It has also approved a temporary waiver of port and tenement fees for up to two years to assist during the mine’s ramp-up phase.

Openpit operations began in July 2024, with underground production already under way since April. Full underground output is expected by September 2026, offering operational advantages such as lower environmental impact and reduced ore contamination.

The government’s Exploration Incentive Scheme (EIS), which helped fund early-stage drilling at Kathleen Valley, continues to play a role in advancing exploration across remote areas. Liontown drilled two new holes under the scheme, improving its geological understanding beyond the defined resource.

"It's pleasing to see the EIS continuing to deliver strong results while driving new exploration in some of the state's most remote regions," Michael added.

With global demand for lithium expected to rebound as electrification accelerates, the government has signalled its commitment to keeping Western Australia at the centre of global supply chains.

"We are working with industry to ensure WA remains a global leader in the lithium-ion battery supply chain, with our Lithium Industry Support Programme helping the sector navigate global market fluctuations," Michael said.