LG Energy Solution has secured lithium carbonate, a key material for battery cathodes, in response to the U.S. Inflation Reduction Act.

Recently, LG Energy Solution announced that it has signed a long-term supply agreement for lithium carbonate with U.S.-based Compass Minerals at Park One in Yeouido. The signing ceremony was attended by LG Energy Solution’s purchasing center head, Executive Vice President Kim Dong-soo, Compass Minerals’ lithium division head Chris Yandell, and Director of Lithium Process Technology Ryan Bartlett. The two companies had previously signed a Memorandum of Understanding (MOU) regarding lithium supply in June of this year.

With this agreement, LG Energy Solution will receive 40% of the lithium carbonate (approximately 11,000 tons expected annually) produced by Compass Minerals over the next six years starting from 2025. Additionally, both companies plan to negotiate a supply agreement for lithium hydroxide, a key material for high-nickel batteries.

Global mineral company Compass Minerals plans to use brine, a saline water byproduct from producing potassium sulfate and magnesium chloride at Great Salt Lake in Utah, to produce lithium carbonate.

By employing the Direct Lithium Extraction (DLE) method, which directly extracts lithium from brine, they aim to produce lithium in an environmentally friendly manner, resulting in lower carbon emissions during production compared to traditional lithium producers.

This agreement enhances LG Energy Solution’s ability to respond to the U.S. Inflation Reduction Act by securing essential battery materials locally in North America, while also strengthening its competitiveness in building a sustainable supply chain through ESG (Environmental, Social, Governance) considerations.

Executive Vice President Kim Dong-soo stated, “By partnering with Compass Minerals, a company that produces lithium in an environmentally friendly manner, we are achieving dual objectives: responding to the IRA and enhancing our ESG competitiveness. We will lead the North American battery market through a stable local supply chain.”

Chris Yandell, head of Compass Minerals’ lithium division, noted, “This agreement marks an important milestone for our company as we enter the rapidly growing lithium market. We are very pleased to establish a partnership with a distinguished company like LG Energy Solution, and we will take the lead in building a differentiated battery supply chain together.”

This year, LG Energy Solution secured MOUs for diversified supply chains, including an agreement for natural graphite supply in Australia and 7,000 tons of cobalt sulfate from Canadian company Electra, as well as 255,000 tons of lithium hydroxide from Avalon and Snow Lake. Additionally, they acquired 45,000 tons of lithium hydroxide from the European lithium producer, German Vulcan Energy, and 700,000 tons of spodumene concentrate from Australian company Liontown.

Lee Sang-jin daedusj@autodiary.kr