▲LG Energy Solution raw material procurement details (Data source: LG Energy Solution)


Signed a business agreement for supplying raw materials with three Canadian companies
Gaining leadership in the battery supply chain in North America

LG Energy Solution is further strengthening its supply chain for key battery raw materials in North America, where the fastest growth in the electric vehicle market is expected, by signing business agreements for the supply of cobalt and lithium with three Canadian mineral companies that produce key battery raw materials.

LG Energy Solution announced on the 22nd that it has signed business agreements with Canadian mineral companies Electra, Avalon, and Snowlake to receive key battery raw materials such as cobalt sulfate and lithium hydroxide.

LG Energy Solution has agreed to supply 7,000 tons of cobalt sulfate for three years starting in 2023 from Electra, the only supplier in North America capable of refining cobalt sulfate.

A contract for lithium hydroxide, a key raw material for high-performance, high-capacity electric vehicle batteries, is also being pursued.

Additionally, it was agreed to supply 55,000 tons of lithium hydroxide produced by Avalon for five years starting from 2025 and 200,000 tons of lithium hydroxide produced by Snowlake for ten years.

We plan to sign this contract after discussing details of the supply of key raw materials with these companies in the future.

LG Energy Solution recently launched in the United States As the Inflation Reduction Act (IRA) comes into effect, we are expanding strategic partnerships, including signing mid- to long-term supply contracts with companies that mine and process key battery raw materials in North America.

In addition, as global management uncertainty increases, the ability of companies to diversify their raw material supply chains has become a key criterion for assessing future competitiveness. As such, companies are accelerating efforts to reduce their dependence on raw materials concentrated in certain countries and to build supply chain capabilities that can proactively and flexibly respond to management uncertainty factors.

LG Energy Solution expects that through this business agreement, it will be able to further strengthen its ability to build a supply chain that satisfies the IRA incentive conditions.

LG Energy Solution Vice Chairman Kwon Young-soo said, “This business agreement is a meaningful achievement in establishing a stable raw materials supply chain in the North American market, where we announced our mid- to long-term business strategy to focus our core capabilities.” He added, “LG Energy Solution will continue to expand strategic partnerships with key mineral companies and strive to become ‘the No. 1 profitable company that customers trust and love the most by providing the highest level of QCD. ’”

Meanwhile, LG Energy Solution is working to build a management environment that can stably procure key raw materials even when unpredictable supply chain shocks occur, such as a sharp rise in raw material prices in certain countries outside of the North American market.

In fact, it has signed a contract to supply 45,000 tons of lithium hydroxide for 5 years with Germany's Vulcan Energy, a European lithium producer, secured 700,000 tons of lithium concentrate, a raw material for lithium hydroxide, with Australia's Liontown for 5 years, secured 690,000 tons of lithium concentrate with Canada's Sigma Lithium for 6 years, and signed a contract to supply 55,000 tons of lithium hydroxide and carbonate for 9 years with Chile's leading lithium company SQM.We secured a mid- to long-term supply contract network through business agreements with overseas mining companies.