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WesCEF and LG Energy Solution Collaborate for Sustainable Lithium Supply to North America
WesCEF and LG Energy Solution Collaborate for Sustainable Lithium Supply to North America

WesCEF and LG Energy Solution Collaborate for Sustainable Lithium Supply to North America

  • 14-Feb-2024 3:28 PM
  • Journalist: Sasha Fernandes

LG Energy Solution (KRX: 373220) has officially inked an offtake agreement with Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) to secure a stable supply of lithium concentrate, marking another significant step in their ongoing collaboration. The primary objective of this partnership is to provide efficient and sustainable power solutions to the ever-growing North American market.

This latest agreement solidifies the collaboration between LG Energy Solution and WesCEF, which has been evolving with a focus on delivering top-tier, IRA-compliant batteries to meet the demands of the market. Under the terms of the offtake agreement, WesCEF commits to supplying LG Energy Solution with up to 85,000 tons of lithium concentrate. This concentrate is a crucial precursor for producing approximately 11,000 tons of lithium hydroxide, an essential raw material for cathodes in lithium-ion batteries.

The ongoing partnership between LG Energy Solution and WesCEF has been active since 2022 when they initially signed a five-year offtake agreement for WesCEF's battery-grade lithium hydroxide, totalling 50,000 tons. The present agreement further reinforces their commitment to clean energy transition and strengthens the foundation for long-term collaboration.

WesCEF's lithium hydroxide, destined for LG Energy Solution, will originate from the Mt. Holland lithium project, Western Australia. This project, touted as one of the largest hard-rock lithium initiatives globally, is currently in the construction phase, with production expected to commence in the first half of the calendar year 2025. To support the project, WesCEF and Sociedad Química y Minera (SQM) have invested over AUD 2 billion, with Covalent Lithium managing the development and operation aspects as appointed by the joint venture partners.

In parallel efforts to fortify its lithium supply chain, LG Energy Solution has also entered into a partnership with SQM, a prominent global mining company based in Chile and a significant investor in the Mt. Holland lithium project. This partnership was solidified through a new long-term supply agreement for lithium carbonate and lithium hydroxide, replacing the previous contract. The revised agreement, valid for seven years, sees a nearly tripled offtake amount from 36,000 tons to 100,000 tons. This strategic move enhances the stability of the supply of IRA-compliant lithium, supporting LG Energy Solution's business expansion in North America.

Kang Yeol Lee, Senior Vice President of Procurement Center at LG Energy Solution, emphasized the company's commitment to sustainability, stating, "As an industry leader, in line with the global trend of electrification and corresponding clean energy policies, we are upholding the value of sustainability in not just our products but every aspect of our business, including the supply chain." Lee further highlighted the strategic partnerships with major suppliers like WesCEF as integral to ensuring stable procurement of key raw materials, facilitating the delivery of advanced battery technologies at competitive prices. This commitment underscores LG Energy Solution's role as a leader in shaping the future of clean and sustainable energy solutions.

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