South Korea’s LG Chem Ltd., the parent of world’s No. 2 battery manufacturer LG Energy Solution Ltd. (LGES), has secured North American spodumene concentrate for the first time in the local industry, a move that will help the company boost its supply network.

LG Chem announced Friday that it signed an agreement with U.S. mining company Piedmont Lithium Inc. to buy 200,000 tons of spodumene concentrate, a high-purity material that processes lithium ore. The material allows extraction of hydroxide that is a key material for batteries.

Under the agreement, Piedmont Lithium will supply 50,000 tons of spodumene concentrate from a Canadian mine annually for four years from the third quarter of this year. The amount can extract 30,000 tons of lithium hydroxide, which is equivalent to the amount that goes into 500,000 high-performance electric vehicles.

The North American Lithium (NAL) mine in Quebec, Canada, in which Piedmont Lithium owns a 25 percent stake, is the only lithium mine in North America capable of commercial production this year. LG Chem plans to use the lithium mined in North America to produce cathode materials for its major clients in the region.

LG Chem is the first among local secondary battery makers to secure North American lithium. Using North American spodumene concentrate will help the company meet the U.S. Inflation Reduction Act (IRA) for tax credits while at the same time ease regional dependency of secondary battery key minerals.

LG Chem also signed a $75 million equity agreement with Piedmont Lithium for a 5.7 percent stake. The agreement will give LG Chem the rights for 10,000 tons of lithium hydroxide produced by Piedmont Lithium in the U.S. a year, which will help enhance stability in supply.

“This agreement allows LG Chem to provide differentiated values to North American customers with products that satisfy IRA standards by preemptively securing raw materials in the U.S., our key market,” said Shin Hak-cheol, chief executive officer at LG Chem. “We will lead the battery material market by building various partnership, including joint metal investments with automotive OEMs and battery makers.”

By Pulse

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