LG Energy Solution (LGES) has bolstered its battery minerals strategy through a new agreement with Tesla lithium supplier Liontown, aimed at securing high-quality lithium spodumene from the Kathleen project.
Signed on July 4, 2024, the convertible note subscription agreement extends LGES’s existing offtake arrangement with Liontown by an additional 10 years, totaling 15 years.
Under the agreement, Liontown will supply 700kt of spodumene concentrate over the first 5 years and 1,500kt over the subsequent decade. This collaboration also includes plans to explore the feasibility of establishing a lithium refinery, ensuring compliance with Inflation Reduction Act (IRA) standards for critical minerals used in batteries.
David Kim, CEO of LG Energy Solution, emphasized the strategic significance of the partnership, stating, “The agreement represents another significant step in our value chain investment strategy aimed at enhancing its resilience to market uncertainties.”
LG Energy Solution plans to invest US$250 million (A$379 million) through Convertible Notes to support Liontown’s Kathleen Valley Project in Western Australia, with initial lithium spodumene production expected by the end of July.
The partnership aligns with LGES’s efforts to strengthen its battery supply chain amid preparations to commence 4680 battery production in South Korea and Arizona. Liontown, which also holds lithium supply agreements with Tesla and Ford, reinforces LGES’s position in securing IRA-compliant battery minerals critical for electric vehicle production in the United States.
