Liontown shares rose as much asAustralia's Liontown Resources said on Wednesday it signed a five-year deal with Tesla to supply spodumene concentrate to the electric car maker, a move that also sent the lithium miner's shares nearly up. 20%.

Starting in 2024, Tesla will buy 100,000 tonnes (dry) of concentrate in the first year, increasing to 150,000 tonnes per year in subsequent years.

Lithium prices have soared over the past few years. In 2021, in particular, suppliers are scrambling to meet demand as automakers gravitate toward electric vehicles, with prices about eight times higher than at the start of 2021.

Liontown will supply lithium through its flagship Kathleen Valley Lithium project in Western Australia, which is expected to start commercial production in 2025. Supply to Tesla will account for about a third of the project's annual capacity.

In addition, Liontown has a lithium supply agreement with South Korea's LG Chem's battery division.

19.8 per cent to $1.665, their biggest intraday gain since September 13, 2021.