LG Energy Solution partners with Australian lithium producer to secure EV raw material

By Kim Joo-heon Posted : February 14, 2024, 15:42 Updated : February 14, 2024, 15:54
Courtesy of LG Energy Solution
[Courtesy of LG Energy Solution]

SEOUL -- LG Energy Solution, the battery-making wing of South Korea's LG Group, has partnered with Australia's lithium producer WesCEF to receive lithium concentrate, a core raw material for electric vehicle batteries. The South Korean battery maker will secure up to 85,000 tons of lithium concentrate, enough for about 270,000 high-performance electric vehicles with a range of more than 500 kilometers (310.7 miles) on a single charge. 

Lithium concentrate serves as raw material for lithium hydroxide, a critical component used in cathodes that determine the capacity and voltage of batteries. Previously, LG Energy Solution (LGES) signed an agreement with WesCEF to receive 50,000 tons of lithium hydroxide for five years starting in 2025.

LGES said in a statement on February 14 that WesCEF will provide up to 85,000 tons of lithium concentrate for about a year. "Partnering with major suppliers with great potentials like WesCEF, we will ensure stable procurement of key raw materials, thereby delivering advanced battery technologies at competitive prices," said Kang Yeol-lee, senior vice president of LGES' procurement center.

The supply deal can help LGES overcome the United States government's Inflation Reduction Act (IRA). The IRA offers tax credits to EVs assembled in North America, and contains more than a certain percentage of core minerals extracted in the region and countries that signed Free Trade Agreements (FTAs) with the U.S. WesCEF's lithium carbonate meets the requirements for IRA subsidies. LGES is currently building joint battery plants with General Motors in Ohio, Tennessee, and Michigan. 

WesCEF is a subsidiary of Australia's conglomerate Wesfarmers. WesCEF has established a joint venture with SQM, a Chilean supplier of plant nutrients, iodine, lithium, and industrial chemicals, to cooperate in developing mining and lithium hydroxide production facilities.
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