LG Energy Solution is actively strengthening its battery supply chain in North America.
LG Energy Solution has signed a joint development agreement and strategic investment contract with Australian battery materials and equipment company Novonix. Synthetic graphite is a key material for battery anodes.
Under this agreement, LG Energy Solution will actively pursue joint development of synthetic graphite with Novonix. If successful, it will secure over 50,000 tons of supply for the next 10 years. Additionally, they have agreed to receive exclusive supply of Novonix’s production for a certain period at competitive prices.
Moreover, LG Energy Solution has decided to invest approximately $30 million to acquire Novonix’s convertible bonds (CB) to ensure investment stability and build a strong cooperative relationship with key material companies.
Founded in 2012, Novonix is an anode material manufacturer headquartered in Brisbane, Australia. It currently owns a synthetic graphite production facility in Tennessee, USA, establishing a strong supply chain in North America that can respond to the Inflation Reduction Act (IRA).
LG Energy Solution plans to strengthen its supply chain of key materials in North America through this partnership, effectively responding to the IRA. According to the Korea International Trade Association, last year, 91.1% of the synthetic graphite imported by domestic companies came from China, indicating an urgent need to diversify the supply chain for anode materials to fulfill IRA requirements.
Kim Dong-soo, Executive Director of LG Energy Solution’s Purchasing Center, stated, “Through our collaboration with Novonix, which has production capabilities in North America, we can reliably secure the key material for batteries, allowing us to actively respond to the surging customer demand. We will proactively establish a robust raw material supply chain to offer our customers world-class QCD (Quality, Cost, and Delivery).”
Chris Burns, CEO of Novonix, expressed, “We are delighted that Novonix can supply high-performance synthetic graphite to LG Energy Solution through this agreement. Our collaboration with LG Energy Solution will play a significant role in leading the synthetic graphite supply chain in the North American battery market moving forward.”
Lee Sang-jin daedusj@autodiary.kr