South Korea’s LG Energy Signs Battery Metal Supply Deals with Canadian Miners

South Korean battery maker LG Energy Solution (LGES) announced on Friday it has signed lithium and cobalt supply agreements with three Canadian mining companies, as the company wants to expand its presence in North America in the wake of U.S. Inflation Reduction Act (IRA) which incentivizes manufacturing of electric vehicles (EVs) and EV battery components in North America. LGES, which supplies Tesla among other EV makers, said in a statement the agreements were part of an effort to expand mid- to long-term supply contracts with companies that mine and process key battery materials in North America.

The IRA, which was signed into law by Biden last month, requires a percentage of critical minerals used in electric vehicle (EV) batteries come from the United States or an American free-trade partner.

LGES said it will acquire 7,000 tonnes of cobalt sulfate for three years from 2023, 55,000 tonnes of lithium hydroxide for five years from 2025, and 200,000 tonnes of lithium hydroxide for 10 years from three Canadian mining firms, Electra, Avalon and Snowlake respectively.

Electra is known to be the only supplier capable of refining cobalt sulfate in North America.

As a leading global manufacturer of lithium-ion batteries, LGES has been at the forefront in securing key raw materials for EV battery production, inking multiple agreements and memorandums of understanding (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 offtake agreements with Australia’s Liontown Resources (spodumene concentrate) and Germany’s Vulcan Energy Resources (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.

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