LG Energy Solution’s plant in Holland, Michigan, in the U.S., which produces ESS. LG Energy Solution
LG Energy Solution said on the 1st that it has signed a long-term lithium carbonate supply contract worth $1.5 billion, or about 2.05 trillion won, with Smackover Lithium, a U.S. lithium development company.
Smackover Lithium is a joint venture established by Standard Lithium, a U.S. lithium developer, and Equinor, Norway’s state-owned energy company.
LG Energy Solution (373220.KS) will receive a total of 80,000 tons of lithium carbonate over 10 years, starting in 2029 when Smackover Lithium begins full-scale production.
That volume is enough to build about 1.8 million high-performance electric vehicles capable of traveling more than 500 kilometers on a single charge.
Smackover Lithium plans to produce high-quality lithium carbonate at its Southwest Arkansas Project in Arkansas using direct lithium extraction (DLE) technology, an environmentally friendly method that minimizes carbon emissions.
The contract was pursued to get ahead of surging demand for lithium carbonate.
Rising electricity demand in North America has driven rapid growth in the energy storage system (ESS) market, making local supply chains for key battery cathode materials, including those for lithium iron phosphate (LFP) batteries, a central challenge.
Lithium carbonate is used mainly as a core raw material for LFP and ternary batteries. Along with lithium hydroxide, which is used primarily in high-performance high-nickel batteries, it is considered a critical mineral driving the electric vehicle and energy transition markets.
LG Energy Solution expects that securing a stable U.S. supply chain built on environmentally friendly production methods will allow it to meet eligibility requirements for benefits under the Inflation Reduction Act (IRA) while also strengthening its environmental, social and governance (ESG) credentials.
LG Energy Solution is building and operating eight production facilities in North America. The company plans to establish a complete supply chain running from local raw material sourcing through battery production.
“It is deeply meaningful to sign a contract with LG Energy Solution, a world-class battery manufacturer,” Standard Lithium CEO David Park said. “By supplying U.S.-produced lithium carbonate to LG Energy Solution on a long-term and sustainable basis, we will build a solid partnership in which both companies grow together.”
Lee Kang-yeol, executive vice president and head of LG Energy Solution’s procurement center, said the partnership is a meaningful achievement that upgrades supply chain stability by securing critical minerals produced in an environmentally friendly manner in the strategic North American market. “Through local production and raw material sourcing in the United States, we will deliver more competitive and sustainable products,” he said.
LG Energy Solution has been building a stable raw material supply chain by expanding strategic partnerships with leading companies in major mineral-producing countries.
The company previously signed a long-term supply contract for 100,000 tons of lithium hydroxide and lithium carbonate with SQM of Chile, the world’s largest lithium producer. It also signed a contract with Australia’s Liontown to receive 1.75 million tons of lithium concentrate.