LG Energy Solution is intensifying its efforts to localize critical mineral sourcing in North America by finalizing a long-term lithium supply agreement with a US developer in anticipation of increasing demand for electric vehicles (EV) and energy storage systems (ESS).
The firm announced that it has finalized a 10-year agreement to obtain lithium carbonate from the US lithium developer Smackover Lithium.
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According to the agreement, the company will obtain a total of 80,000 metric tons of lithium carbonate over a decade, with deliveries scheduled to commence in 2029, when Smackover Lithium is anticipated to initiate commercial production.
It stated that the amount is sufficient to produce batteries for approximately 1.8 million high-performance electric vehicles with a range exceeding 500 kilometers on one charge.
Smackover Lithium, a collaboration between US lithium developer Standard Lithium and Norway's state-owned energy firm Equinor, intends to manufacture lithium carbonate at its South West Arkansas Project utilizing direct lithium extraction technology. The method retrieves lithium from subterranean brine and minimizes the ecological impact of traditional extraction techniques.
“The agreement marks another step toward establishing a solid and resilient supply chain that keeps our products competitive in key strategic markets,” says Lee Kang-yeol, LG Energy Solution’s procurement center leader.
“By bringing both battery production and sourcing to the US, we will deliver competitive and sustainable products to our customers, driving the global energy storage and EV markets.”
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Lithium carbonate is an essential raw material for nickel-cobalt-manganese and lithium iron phosphate (LFP) batteries. Demand is anticipated to grow as battery manufacturers increase LFP output, especially for ESS.
LG Energy Solution stated that the deal will enable it to secure a consistent supply of lithium produced in the US, while boosting its competitiveness in the North American battery sector.
The firm anticipates that the local sourcing agreement will assist it in fulfilling essential mineral sourcing demands set by the US Inflation Reduction Act.
LG Energy Solution has obtained lithium supplies by partnering with leading producers in various resource-rich nations.
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It has established long-term contracts with Chilean lithium producer SQM for 100,000 tons of lithium hydroxide and lithium carbonate, and with Australia's Liontown for 1.75 million tons of lithium concentrate.