LG Chem announced on February 17 that it has successfully secured a spodumene concentrate (SC6) supply of about 200,000 metric tons from Piedmont Lithium, emphasizing that it is the first South Korean chemical firm to source lithium from North America.
Apart from the offtake agreements, it has also acquired financial holdings of about 6% in the North American lithium company through a $75 million (KRW 94 billion) equity investment.
“We are pleased to partner with LG Chem to supply lithium resources produced in North America. As LG Chem has a strong commitment to US electric vehicle battery manufacturing, Piedmont looks forward to discussing additional potential cooperation with LG Chem in North America.”
Piedmont Lithium CEO Keith Phillips
Over a four-year period beginning in Q3 2023, Piedmont Lithium committed to supplying LG Chem with 50,000 metric tons of SC6 annually from a Canadian mine.
LG Chem will use this spodumene concentrate to extract around 30,000 metric tons of lithium hydroxide for its cathode materials. Remarkably, that amount can produce approximately 500,000 electric vehicle batteries.
Given that LG Chem now has a stake in Piedmont, the South Korean firm ultimately gained “priority negotiation rights” for an annual lithium hydroxide supply of 10,000 tons.
What’s the big deal?
LG Chem now qualifies for the Inflation Reduction Act standards in the US as it aims to utilize Piedmont’s North American Lithium (NAL) mine to manufacture cathode materials for its major North American customers.
“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 US, our key market. We will lead the battery material market by building various partnerships, including joint metal investments with automotive OEMs and battery makers.”
LG Chem CEO Hak Cheol Shin
The venture has also enabled the South Korean firm to solidify its supply chain beyond its homeland. It aims to lessen the regional abundance of crucial components for secondary batteries.
It is also worth noting that LG Chem has sought collaborations with other raw materials firms worldwide, including Australia’s Tianqi Lithium, to secure the necessary supply of raw materials for its operations.