Piedmont Lithium Signs Contract to Supply 200,000 Tons of Lithium and Lithium Concentrate
Meets Inflation Reduction Act Standards...Mitigates Regional Concentration of Critical Minerals
Invests 96 Billion KRW Equity for Supply Chain Partnership
[Asia Economy Reporter Choi Seoyoon] LG Chem has strengthened its supply chain by securing North American lithium concentrate for the first time among domestic battery material companies. Lithium concentrate is a high-purity mineral processed and concentrated from lithium ore, from which lithium hydroxide, a key raw material for batteries, can be extracted.
On the 17th, LG Chem announced that it had signed a lithium concentrate purchase contract (Offtake) with U.S. mining company Piedmont Lithium for a total of 200,000 tons. Piedmont Lithium plans to supply LG Chem with 50,000 tons annually for four years starting from the third quarter of this year from its Canadian mine. This amount can extract about 30,000 tons of lithium, enough for approximately 500,000 high-performance electric vehicles.
The NAL (North American Lithium) mine in Quebec, Canada, indirectly owned through equity investment by Piedmont Lithium, is the only lithium mine in North America capable of commercial production this year. LG Chem plans to use lithium mined in North America for cathode material production supplied to major North American customers. The NAL mine is located in Quebec, Canada, where Piedmont Lithium holds a 25% stake.
LG Chem is the first domestic battery material company to secure North American lithium. Using North American lithium concentrate is expected to help meet the tax benefit criteria under the U.S. Inflation Reduction Act (IRA) while contributing to alleviating the regional concentration of critical minerals for secondary batteries.
The only commercially producible NAL lithium mine in Quebec, Canada, North America this year [Photo by LG Chem]
LG Chem also signed an equity investment contract worth $75 million (approximately 96 billion KRW) with Piedmont Lithium, securing about a 6% stake. In addition to lithium concentrate from the Quebec mine, LG Chem obtained a right of first negotiation for 10,000 tons per year of lithium hydroxide produced by Piedmont Lithium in the U.S., further enhancing raw material supply stability.
Founded in 2016, Piedmont Lithium is a lithium mining company headquartered in North Carolina, USA. It is listed on the New York Stock Exchange and also has a secondary listing on the Australian Securities Exchange. Piedmont Lithium is developing lithium mines and lithium production projects in North Carolina and Tennessee, USA, and holds stakes in lithium mining companies developing mines in Quebec, Canada, and Cape Coast, Ghana.
Keith Phillips, CEO of Piedmont Lithium, said, "We are pleased to supply lithium resources produced in North America to LG Chem," adding, "Since LG Chem shows strong commitment to the U.S. electric vehicle battery market, we look forward to expanding cooperation in the North American region."
LG Chem is cooperating with various global raw material companies, including Piedmont Lithium, to secure stable raw material supply and cost competitiveness. It has also made a strategic equity investment in Tianqi Lithium, which owns mines in Australia. LG Chem plans to continue investing to secure key battery materials that meet the standards of the Inflation Reduction Act and the European Critical Raw Materials Act (RMA).
Shin Hak-cheol, Vice Chairman of LG Chem, stated, "By proactively securing raw materials in the key U.S. market, we will deliver differentiated value by providing products that meet IRA standards to customers," adding, "We will lead the battery material market by building various partnerships, including joint metal investments with electric vehicle and battery companies."
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