LG Chem signed offtake agreements for 200,000 metric tons of spodumene concentrate (SC6) with Piedmont Lithium Inc. With this agreement, it became the first Korean company to secure lithium from North America. SC6 is a high-purity material that processes lithium ore, which extracts lithium hydroxide that serves as a key material for batteries.
By becoming the first Korean battery materials company to secure spodumene concentrate from North America, LG Chem strengthens its supply chain.
For Use in Cathode Materials
Mainly, the supply agreement with Piedmont involves a total of 200,000 metric tons of SC6. Starting in the 3Q, Piedmont will supply 50,000 metric tons per year of SC6 from a Canadian mine over a four-year term. Consequently, LG Chem will extract approximately 30,000 metric tons of lithium hydroxide. This is equivalent to the amount that goes into 500,000 high-performance electric vehicles.
Piedmont has a 25 percent ownership interest in North American Lithium (NAL) — a Canadian mine in Quebec. Moreover, NAL is the only lithium mine in North America capable of commercial production this year. LG Chem plans to use the lithium mined in the region to produce cathode materials supplied to key North American customers.
LG Chem became the first Korean battery materials company to secure SC6 from North America. With the use of North American lithium, LG Chem fulfills the U.S. IRA (Inflation Reduction Act, passed by the U.S. Congress). Additionally, it expects to mitigate the regional concentration of key materials for secondary batteries.
Established in 2016, Piedmont is a lithium mining company headquartered in North Carolina, in the United States. Piedmont is listed on both Nasdaq and Australian Securities Exchange. Also, it has stakes in lithium mine developers in Quebec, Canada, and Cape Coast, Ghana. Moreover, it has lithium mine development and production projects underway in North Carolina and Tennessee.
Strategic Partnerships, Investments
Also, LG Chem signed an agreement with Piedmont to make an equity investment of US$75 million (KRW 94 billion). This earns the company an approximately 6 percent stake in Piedmont. Further, LG Chem stabilized its raw materials supply by obtaining priority negotiation rights for 10,000 tons of lithium hydroxide per year produced by Piedmont Lithium in the U.S.
LG Chem has been partnering with a wide range of global raw materials companies, including Piedmont. This strategy aims to secure stable raw materials supply and cost competitiveness. LG Chem also made a strategic equity investment in Tianqi Lithium, a company that owns a mine in Australia. Moving forward, LG Chem plans to continue its investment to secure key battery materials that satisfy criteria laid out in the US IRA and RMA (Critical Raw Materials Act) in Europe.
LG Chem’s Chief Executive Officer Hak Cheol Shin, said, “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 U.S., our key market. We will lead the battery material market by building various partnerships, including joint metal investments with automotive OEMs and battery makers.”
Keith Phillips, CEO of Piedmont, said, “We are pleased to partner with LG Chem to supply lithium resources produced in North America. As LG Chem has a strong commitment to U.S. electric vehicle battery manufacturing, Piedmont looks forward to discussing additional potential cooperation with LG Chem in North America.”