SEOUL : South Korean battery maker LG Energy Solution announced Friday it has signed a multi-year agreement with U.S. mineral provider Compass Minerals.
Under the contract, the company would receive 40% of the Compass Minerals’ annual production of 11,000 metric tons of battery-grade lithium carbonate from 2025 to 2030.
LG Energy Solution said the price for the minerals would be dictated by the market index.
Lithium carbonate is an essential ingredient needed for making lithium-ion batteries, which are used heavily in electric vehicles and energy storage systems, two major product lines of LG Energy Solution.
By securing a steady supply of these substances, LG Energy Solution may be able to bypass the impact of the Inflation Reduction Act signed by U.S. President Joe Biden in August.
Under the new law, electric vehicles must be assembled in North America to qualify for tax credits. There is also a requirement that a certain percentage of battery components be made in North America.
“Until now, LG Energy Solution and other Korean battery makers have been buying key materials from China. But IRA is making them have to change their supplier base to North America,” Daelim University automotive Professor Kim Pil-soo told UPI News Korea.
“Other South Korean battery manufacturers will probably continue to sign similar deals in the future,” he said.
LG Energy Solution also said it would make further efforts to secure more of the battery ingredients from North America with the goal of sourcing 72% of the critical minerals there within five years.
“This offtake agreement with Compass Minerals culminates our continued endeavors to establish a stable supply of critical minerals in North America, as we adapt to recent regulatory changes and intensifying competition over key raw materials for batteries,” LG Energy Solution Senior Vice President Kim Dong-soo said in a statement.
Source : upi
