South Korean electric vehicle battery manufacturer LG Energy Solution (LGES) announced its first offtake agreement with a US-based lithium supplier.
The agreement between LGES and Compass Minerals, is still non-binding, and makes the electric vehicle battery manufacturer from South Korea to be supplied with lithium carbonate and lithium hydroxide starting in 2025.
LGES has secured up to 40 percent of the lithium carbonate and lithium hydroxide produced by Compass Minerals over a seven year period. The two companies now want to work towards a binding supply contract. It is not clear from the memorandum of understanding when this should be done.
The supply of lithium as a mineral to make electric vehicle batteries is very important for LGES. In March, LGES announced three important projects related to the production of electric vehicle batteries. LGES is building a 45 GWh capacity electric vehicle battery plant in Canada together with Stellantis.
Additionally an 11 GWh plant for round cell production is under construction in Arizona. The last project is related to the expansion of their existing electric vehicle battery factory in the state of Michigan, USA.
“Securing key raw materials has become critically important, in order to maintain our lead position in the global battery market,” says Dongsoo Kim, senior vice president of procurement center at LG Energy Solution.
Dongsoo Kim said his company will support the establishment of a stable supply chain for the electric vehicle industry in North America.
“LGES will make sure to support the establishment of steady supply chain in North America, while it continues to seek and acquire environmentally friendly produced battery-grade lithium worldwide.” Dongsoo Kim said
LG Energy Solution has also signed lithium offtake agreements with other suppliers including SQM, Liontown Resources, Vulcan Energy and Sigma Lithium.
