- LGES to be supplied with 40 percent of Compass Minerals' annual lithium carbonate production over six years, expected to start in 2025
- The partnership embodies LGES's efforts in securing a stable critical mineral supply chain in North America while promoting a sustainable value chain
SEOUL, South Korea, Nov. 11, 2022 /PRNewswire/ -- LG Energy Solution (LGES; KRX: 373220) signed a binding offtake agreement this week on the purchase of battery-grade lithium carbonate with Compass Minerals (NYSE: CMP), a U.S. producer of essential minerals, to sustainably enhance the stability of its critical mineral supply chain.
The agreement, set to begin in 2025, is for a six-year term, with LGES receiving 40 percent of Compass Minerals' anticipated annual production of 11,000 metric tons during phase 1 of the lithium brine development project at its Ogden, Utah operation site on the Great Salt Lake. The companies also expect to cooperate in good faith on a portion of phase 2 production of battery-grade lithium hydroxide.
Compass Minerals is known for its low carbon emission practices compared to other lithium producers, enabled through direct extraction of lithium (DLE) from brines and utilizing solar evaporation processes. Through these measures, the company is pursuing sustainable lithium production to support the North American battery market.
"This offtake agreement with Compass Minerals culminates our continued endeavors to establish a stable supply chain for critical minerals in North America, as we adapt to recent regulatory changes and intensifying competition over key battery raw materials," said Dongsoo Kim, Senior Vice President of the Procurement Center at LG Energy Solution. "Our partnership bears even more significance as we expect Compass Minerals' sustainable lithium project to help advance our mission of achieving carbon neutrality across the entire value chain."
"This binding supply agreement represents an important milestone for our company's entry into a rapidly growing domestic lithium market," said Chris Yandell, Head of Lithium for Compass Minerals. "We are excited to partner with a proven manufacturing leader like LGES to help enable the buildout of a robust and secure advanced battery supply chain."
As announced last month, LGES aims to strengthen its local supply chain for key battery raw materials through strategic partnerships with major suppliers, as well as to secure metals and metal refineries in North America and from FTA countries with U.S. The company will also increase direct sourcing of metals through equity investments and long-term supply agreements. With these measures in place, LGES plans to localize 72% of critical minerals sourcing within five years.
About LG Energy Solution
LG Energy Solution (KRX: 373220), a split-off from LG Chem, is a leading global manufacturer of lithium-ion batteries for electric vehicles, mobility, IT, and energy storage systems. With 30 years of experience in revolutionary battery technology and extensive research and development (R&D), the company is the top battery-related patent holder in the world with over 25,000 patents. Its robust global network, which spans North America, Europe, Asia, and Australia, includes battery manufacturing facilities established through joint ventures with major automakers such as General Motors, Stellantis N.V., Hyundai Motor Group, and Honda Motor Co., Ltd. At the forefront of green business and sustainability, LG Energy Solution aims to achieve carbon neutral operations by 2050, while embodying the value of shared growth and promoting diverse and inclusive corporate culture. To learn more about LG Energy Solution's ideas and innovations, visit https://news.lgensol.com .
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Source: LG Energy Solution Related Stocks: Korea:373220