Last week LG Energy Solution signed separate partnership agreements with three major critical mineral suppliers in Canada.
According to the company, the deals to secure lithium and cobalt from Snow Lake Resources Ltd., Electra Battery Materials Corporation and Avalon Advanced Materials Inc., are in line with LG Energy Solution’s strategic vision to reinforce its key battery materials supply chain in North America.
In a ceremony held on September 22 in Toronto, LGES signed a binding term sheet with Electra. Under the terms of the agreement, Electra will supply 7,000 tons of cobalt sulphate for three years starting in 2023. Electra is the only supplier capable of refining cobalt sulphate in North America.
LGES also signed two non-binding Memorandums of Understanding (MoU) with Avalon and Snow Lake to secure a stable supply of lithium. Under the terms of the MoUs, Avalon will supply LGES with 11,000 tons per year of lithium hydroxide for five years initially, starting in 2025. Once Snow Lakes’s lithium hydroxide production starts in 2025, LGES has agreed it will purchase 20,000 tons per year for ten years.
“As we have recently announced our mid- to long-term strategy to focus on North America, the fastest growing EV market, these partnerships serve as a crucial step towards securing a stable key raw material supply chain in the region,” said Youngsoo Kwon, CEO of LG Energy Solution. “By constantly investing in upstream suppliers and establishing strategic partnerships with major suppliers of critical minerals, LGES will continue to ensure the steady delivery of our top-quality products, thereby further advancing the global transition to EVs and ultimately to a sustainable future.”
The partnerships came came about at a critical time, as securing access to critical minerals for batteries has become ever more important amid the global automakers’ expedited transition to electric vehicles. The Biden Administration’s recently-passed Inflation Reduction Act (IRA), underscores the importance of EV battery components manufactured or assembled in North America, and has further stressed the significance of battery manufacturers’ establishing local supply chain within North America.
To date, LGES has been actively securing key raw materials for EV battery production, inking multiple agreements and MoUs with various suppliers. In North America this year, LGES signed a non-binding MoU with Compass Minerals on lithium carbonate and lithium hydroxide. The company also signed a binding term sheet with Canada’s Sigma Lithium for the supply of battery-grade lithium.
Additionally, LGES struck two off take agreements with Australia’s Liontown Resources Limited (spodumene concentrate) and Germany’s Vulcan Energy Resources Ltd. (battery-grade lithium chemicals), and signed a non-binding MoU with SQM of Chile on investigating and developing joint investment projects of electro-mobility industry value chain.