LG Energy Solution Ltd. has made a preemptive response to the Inflation Reduction Act of the US by securing the supply of lithium carbonate, a key material for battery cathode materials, from America.
The company on Friday announced its recent signing of a long-term contract for lithium carbonate supply with the Overland Park, Kansas-based Compass Minerals of the US at Parc 1 in Seoul's financial district of Yeouido. In June, both sides concluded a memorandum of understanding (MOU) on lithium supply.
Through this contract, LG Energy from 2025 will receive 40% of the annual supply of lithium carbonate (an estimated 11,000 tons) produced by Compass Minerals for six years. The two companies will also seek another deal on the supply of lithium hydroxide, a core material for high-nickel batteries.
Compass Minerals will use the Great Salt Lake in Utah to produce potassium sulfate and magnesium chloride and use waste brine (lake water containing lithium) discarded in the process to make lithium carbonate.
The direct lithium extraction method produces lithium in an eco-friendly way from salt lakes, meaning lower carbon emissions in the production process than through other means.
This latest deal will allow LG Energy to secure more battery core materials from North America. As well as boosting its ability to respond to the anti-inflation law, the company can also raise its environmental, social and governance competitiveness while building its supply chains for raw materials.
Meanwhile,
LG Energy signed an MOU with Australia's Syrah Resources on natural graphite supply to diversify its supply chains this year. Two other MOUs were signed with companies in Canada, namely with Electra Battery Materials for the supply of 7,000 tons of cobalt sulfate and with Avalon Advanced Materials on the supply of 255,000 tons of lithium hydroxide from Snow Lake Lithium.In addition, the Korean battery company secured 45,000 tons of lithium hydroxide from German lithium producer Vulcan Energy and 700,000 tons of lithium concentrate, a raw material for lithium hydroxide, from Australia's Liontown Resources.
Write to Hyung-Kyu Kim at
khk@hankyung.com
