South Korean battery maker LG Energy Solution has signed a six-year battery-grade lithium carbonate purchase agreement with U.S.-based Compass Minerals International, according to foreign media reports.
The agreement will reportedly take effect in 2025. Under the terms of the agreement, LG New Energy will receive 40 percent of the expected annual production of 11,000 tons of the first phase of Compass Minerals’ lithium brine project at Great Salt Lake in Utah. The companies also expect to continue working together on a portion of the second phase of the project’s battery-grade lithium hydroxide production.
Lithium carbonate and lithium hydroxide are reportedly used to produce cathode materials, one of the key materials for high-capacity electric vehicle batteries
LG New Energy is a new company spun off from LG Chem in December 2020, specializing in the battery business, whose customers include Tesla, General Motors and Volkswagen. After the spin-off, LG Chem will own 100% of the new company.
LG New Energy is said to have more than 20% of the global electric vehicle battery market, with production bases in the United States, China, South Korea, Poland, Canada and Indonesia, and is currently working to expand its business in North America.
Earlier this year in October, foreign media reported that LG New Energy plans to operate six factories in North America by 2025 to compete with CATL, the world’s largest power battery maker. By 2025, the company expects its share of North American production capacity to rise to 45 percent, up from about 7 percent today.
The company said securing the key minerals needed for batteries is becoming increasingly important as global automakers accelerate their transition to electric vehicles.
In September, LG New Energy said it had signed separate lithium and cobalt sourcing agreements with three major Canadian suppliers of key minerals to strengthen its supply chain for key battery materials in North America.