LG New Energy said on Friday local time that the company’s sales for the first quarter of this year are expected to reach 8.74 trillion won (currently about RMB 45.623 billion), a year-on-year jump of 101.4%.

In addition, LG New Energy expects operating profit for the first quarter to rise to 633.2 billion won (currently about RMB 3.305 billion), up 144.6 percent year-on-year.

LG New Energy’s projected operating profit exceeded analysts’ expectations, beating the average estimate of several analysts by 26.8%.

LG New Energy’s previous earnings report showed the company’s 2022 revenue at 25.6 trillion won and operating profit at 1.2 trillion won. LG New Energy’s projected operating profit of 633.2 billion won for the first quarter is already half of last year’s full-year operating profit and is expected to increase significantly in 2023.

When LG New Energy released its earnings report on Jan. 27 to disclose its results for the fourth quarter and full year last year, it set a revenue target of 25-30% year-over-year growth for this year, and 101.4 percent year-over-year growth in the first quarter will also help them achieve their full-year revenue growth target.

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As the largest salt producer in North America and the United Kingdom, Compass Mineral plays an important role in a number of industries. However, seeing that the automotive industry is transitioning to electric vehicles, Compass Mineral realizes that the demand for key battery minerals, such as lithium, will only continue to rise.

The company has been in business for 175 years and has annual revenues of $1.2 billion, however, Compass Mineral’s goal is to reduce its reliance on weather-dependent minerals and focus on markets with high growth potential, such as the electric vehicle industry.

In addition, demand for electric vehicles is expected to be higher since the passage of the Inflation Reduction Act on August 16, 2022, with tax credits of up to $7,500 for new purchases and $4,000 for used electric vehicles.

However, for an electric car to qualify, 40 percent of its battery minerals must come from the U.S. or its free trade partners, rising to 80 percent after 2026.

This provision provides a significant opportunity for mineral suppliers like Compass Mineral to fill the growing supply gap. That said, demand for battery-grade lithium in North America is expected to grow 700 percent over the next three years and more than 1,000 percent by 2030.

New government incentives and skyrocketing prices are making lithium mining even more attractive. For this reason, Compass Mineral is advancing its lithium project in Ogden, Utah (near the Great Salt Lake) on a 177,000-acre lease.

Compass Mineral announced another major milestone in the development of the project. The company said it will use EnergySource Minerals’ direct lithium extraction (DLE) technology to extract the minerals with minimal environmental impact. Compass will use the extracted minerals to fulfill supply agreements with electric vehicle leaders, including Ford and LG Energy.

After three years of “extensive testing,” Compass Minerals selected EnergyMinerals’ DTC technology because of its superior absorption capabilities and minimal environmental impact.

Chris YanDELL, Lithium Director at Compass Mineral, said.

"Our selection of ESM was the result of a thorough competitive process and we are pleased to be moving forward with their team as a trusted supplier for our lithium development. Our evaluation over the years has focused on matching the right technology to our specific lithium brine resource - and we believe we have done just that with this supplier selection."

Compass Mineral said the project has the potential for about 2.4 million tons of lithium carbonate equivalent and is fully funded for the next two years. The company also reiterated that it remains on track to become a low-cost producer of battery-grade lithium by 2025.

Most importantly, Compass Mineral is expected to produce significantly less greenhouse gas emissions due to its use of a solar evaporation process. Rick Axthelm, the company’s chief sustainability officer, said.

"Minimizing the environmental impact of our lithium extraction and conversion program has been a key priority for this project since we began evaluating our development options. As we advance toward commercial production, we will continue to prioritize sustainable operations."

Electrek’s view

As more resources (from government and private industry) are being used to promote a sustainable future, better technologies and other resources are being developed to reduce the impact of electric vehicles.

Sustainable extraction technologies are still in the early stages. Demand for electric vehicles will only continue to accelerate for the foreseeable future, and lithium will be in high demand.

In particular, North America’s new climate initiative aims to make sustainable options available to everyone and bring manufacturing back to U.S. soil. To achieve this goal, sustainable extraction methods will be critical.

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LG Energy is re-evaluating the timing, size and other details of the investment due to a significant increase in investment costs caused by a deteriorating business environment, an official from LG Energy said.

The company said the plan has been put on hold because the investment in the new plant has ballooned to about $1.6 billion from the previous $1.31 billion, raising the cost of building the plant by nearly $300 million due to global inflation and the recent sharp devaluation of the Korean currency.

It will now take LG Energy at least 4-6 months to complete its assessment of the plant plan. In the meantime, LG Energy said the other two plants it is building with General Motors Co (GM) in Tennessee and Michigan will go ahead as planned.

LG Energy plans to further boost LG Energy’s position in North America by building a new plant in the U.S. state of Arizona because of rising demand for cylindrical batteries used in electric vehicles and other power tools, Yonhap said. If the plant is completed, it will be the first cylindrical battery plant operated by a South Korean battery maker.

LG Energy currently operates a wholly-owned plant in Michigan and another in Ohio with General Motors (GM), IT House has learned.

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