LG Energy Solution said Friday it has signed supply agreements with three Canadian mineral companies to secure key raw materials used in lithium-ion batteries for electric vehicles.
Under the arrangement with Electra Battery Materials, the Toronto-based battery materials refiner will supply 7,000 metric tons of cobalt sulfate to LG Energy Solution for three years beginning in 2023, the South Korean battery maker said in a release.
LGES signed a memorandum of understanding with Avalon Advanced Materials, a minerals developer, under which Avalon will supply LGES with an annual 11,000 tons of lithium hydroxide for five years starting in 2025.
Another MOU signed with Snow Lake Resources, which primarily engages in lithium mining, commits the Canadian company to supply 200,000 tons of lithium hydroxide to LGES for 10 years from 2025.
Details on the financial terms of the agreements were not available.
The ceremony for the agreements took place in Toronto on Thursday, where the key representatives of the four companies, including LGES Vice President Kim Dong-soo, were present. South Korean Industry Minister Lee Chang-yang also attended the event.
LGES, the world's second-largest battery maker, has been ramping up efforts to diversify the supply channels for raw materials amid growing uncertainties over supply chain bottlenecks.
The latest arrangements will help LGES strengthen its capability in securing the minerals supply chain that measures up to the conditions for US incentives under the newly enacted Inflation Reduction Act, LGES said.
The IRA gives up to $7,500 in tax credits to buyers of EVs assembled only in North America. (Yonhap)