South Korean battery maker LG Energy Solution Ltd. said Friday it has signed a binding agreement with a US minerals provider for a long-term supply of a key lithium product used in electric vehicle lithium-ion batteries.
The offtake agreement with Compass Minerals Inc. is for 40 percent of about 11,000 tons of lithium carbonate the US company is estimated to produce for six years starting in 2025, LG Energy Solution said in a release.
The two companies also agreed to work on a separate supply deal for lithium hydroxide.
Lithium carbonate and lithium hydroxide are the two most common types of lithium products used to make cathode materials for lithium-ion batteries. Cathodes determine the power of EV batteries.
The agreement follows the preliminary memorandum of understanding they had signed in June.
LGES, the world's second-largest battery maker, has been ramping up efforts to secure a stable supply of key battery components from overseas partners in Australia, Europe and South America, to meet the growing EV demand amid rising raw material costs.
It has announced a string of mineral supply deals, including the cobalt sulfate and lithium hydroxide deals with three Canadian mineral companies. It also signed a non-binding supply agreement for natural graphite anode materials with an Australian producer last month.
Compass Minerals, a Kansas-based provider of essential minerals, is pushing for the development of lithium resources with brine from its facility in the Great Salt Lake in Utah, through a sustainable extraction method using renewable energy like solar and wind power.