LG Energy Solution announced on October 8 that it has signed a long-term supply agreement for lithium ore from Canadian producer Elevra Lithium. Starting at the end of this year, the company will receive a total of 240,000 tons of lithium ore over four years.
This amount is equivalent to approximately 30,000 tons of lithium hydroxide, enough to produce batteries for about 700,000 high-performance electric vehicles. The lithium will be sourced from Elevra Lithium's North American Lithium (NAL) mine in Quebec, Canada.
Lithium ore is a raw material processed and concentrated from lithium minerals, which is refined into lithium carbonate and lithium hydroxide. Lithium carbonate is primarily used in lithium iron phosphate (LFP) batteries and nickel-cobalt-aluminum (NCA) batteries, while lithium hydroxide is mainly used in high-performance nickel-rich NCA batteries.
With this agreement, LG Energy Solution secures the upstream part of the value chain in North America, covering raw materials (lithium ore), materials (lithium carbonate, lithium hydroxide, and cathode materials), and batteries. By securing raw materials at the processing stage, the company expects to respond more flexibly to the fluctuating demand for lithium carbonate and lithium hydroxide based on the electric vehicle and energy storage system (ESS) market conditions.
The secured materials will be used at LG Energy Solution's North American battery production facilities. As demand for ESS grows rapidly in North America, driven by the expansion of AI data centers and renewable energy, the company anticipates that this will aid in the production of LFP batteries for ESS.
LG Energy Solution has established five ESS production sites in North America, including three standalone plants: the Lansing and Holland plants in Michigan, and the NextStar Energy plant in Ontario, Canada, as well as joint ventures with Honda and GM in Ohio and Tennessee, respectively. The company plans to expand its production capacity for LFP batteries for ESS to over 50 GWh by the end of this year.
Lee Kang-yeol, Executive Vice President and Head of the Purchasing Center at LG Energy Solution, stated, "This contract is a significant achievement in strengthening the North American raw material supply chain and responding to the rapidly growing North American battery market. Based on a stable supply of lithium ore, we will enhance the stability and flexibility of our supply chain and respond more quickly to customer demand."
Meanwhile, LG Energy Solution reported a 10.5% increase in revenue for the first half of this year, totaling 14.1152 trillion won compared to the same period last year. The shift in production capacity from electric vehicle batteries to ESS batteries has resulted in a 4.6-fold increase in ESS-related sales compared to the same period last year, expanding its share of total revenue to the upper 20% range.
* This article has been translated by AI.
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