LG Chem secures Canadian lithium from Piedmont
LG Chem has secured lithium from North America. The South Korean chemical company has signed offtake agreements with Piedmont Lithium for a total of 200,000 metric tons of spodumene concentrate (SC6). In addition, LG has also taken a financial stake in Piedmont.
Starting in the third quarter of 2023, Piedmont will supply 50,000 metric tons of SC6 per year from a Canadian mine over a period of four years. LG Chem expects to extract about 30,000 metric tons of lithium hydroxide for its cathode materials from this spodumene concentrate, which is enough to make batteries for about 500,000 electric vehicles.
Piedmont first made headlines in 2020 when it entered into an offtake agreement with Tesla – for spodumene concentrate from a Piedmont deposit in North Carolina. As mine operations there were delayed, deliveries also had to be postponed. A new version then replaced the agreement at the beginning of this year. According to this agreement, Tesla will receive SC6 from the second half of 2023 – but now from Canada and not North Carolina.
The North American Lithium (“NAL”) mine in Quebec, in which Piedmont holds a 25 per cent stake, is currently the only lithium mine in North America already mining commercially. The source of battery materials is becoming increasingly important due to EV tax credit requirements in the US. That is why LG Chem’s announcement is crucial to North American customers.
Battery subsidiary LG Energy Solutions has already signed several agreements since 2021 for the supply of lithium from North America, such as with Snow Lake Resources and Avalon Advanced Materials. It also signed offtake agreements with Compass Minerals in the US and Sigma Lithium in Canada. None of these mines are currently in commercial operation, so LG Chem’s statement that it is the first Korean battery materials company to secure SC6 from North America holds true.
The focus on sourcing materials in North America is no coincidence. For one, LGES is expanding its existing battery plant in Michigan and building new cell factories in Canada (together with Stellantis) and Arizona, USA. LG is also General Motors’ battery partner in the Ultium Cells joint venture, which is building several battery factories in the US – so the demand for materials is high. Secondly, as mentioned, batteries with precursors from North America are in high demand in the US due to the new EV tax credit regulations.
LG Chem also signed an agreement with Piedmont for a 75 million dollar capital investment and acquired a six per cent stake in the company. In addition, LG Chem will receive preferential negotiation rights for an additional 10,000 tons per year of lithium hydroxide produced by Piedmont Lithium in the United States. Last November, LG Chem announced the construction of the largest factory for the production of cathode materials for electric car batteries on American soil.
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