SEOUL, South Korea, Feb. 14, 2024 /PRNewswire/ -- LG Energy Solution (KRX: 373220) announced it signed an offtake agreement with Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) for lithium concentrate, further advancing the companies' pre-existing partnership driven by the objective to deliver efficient and sustainable power solutions to the North American market.
Under the agreement, WesCEF will supply LG Energy Solution up to 85,000 tons of lithium concentrate, which could be utilized in producing around 11,000 tons of lithium hydroxide, a crucial raw material for cathodes.
The offtake agreement solidifies LG Energy Solution's partnership with WesCEF, which is built on the company's initiative to deliver top-quality, IRA-compliant batteries to its customers with speed and in scale. The two companies have been working together towards their shared goal of clean energy transition since 2022, when they signed their first, five-year offtake agreement for WesCEF's battery-grade lithium hydroxide, totaling 50,000 tons.
WesCEF's lithium hydroxide will be produced from the Mt. Holland lithium project in Western Australia. One of the largest hard-rock lithium projects globally, the Mt. Holland lithium project is currently under construction, and production is expected in the first half of calendar year 2025. The project has secured over AUD 2 billion from its joint venture partners WesCEF and Sociedad Química y Minera (SQM), with Covalent Lithium acting as the manager appointed by the joint venture to develop and operate the project.
LG Energy Solution and WesCEF are also exploring strategic opportunities for collaboration in upstream minerals and chemical processing. By expanding partnership with a competitive supplier like WesCEF, LG Energy Solution is devoting its efforts to establishing structurally-sound and sustainable supply chain for IRA-compliant critical minerals, through which the company will also be able to secure long-lasting cost-competitiveness.
As part of its efforts to further enhance its lithium supply chain, LG Energy Solution has also secured a partnership with SQM, a global mining company based in Chile and also an investor in the Mt. Holland lithium project, as two companies signed a new long-term supply agreement for lithium carbonate and lithium hydroxide last year. In this new contract that replaces the previous one in force, the offtake amount has nearly tripled from the remaining contract volume (36,000 tons) to 100,000 tons over seven years, thereby ensuring more stable supply of IRA-compliant lithium that will drive the company's business expansion in North America.
Critical minerals and raw materials secured through this robust supply chain will be assembled into the company's innovative lithium-ion batteries at the manufacturing facilities in North America, making them IRA-compliant power solutions that will propel clean energy transition in the region. LG Energy Solution has eight facilities currently operating or under construction in North America, with stand-alone facilities in Michigan and Arizona and six joint venture facilities with major automakers.
"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 supply chain," said Kang Yeol Lee, Senior Vice President of Procurement Center at LG Energy Solution. "Partnering with major suppliers with great potentials like WesCEF, we will ensure stable procurement of key raw materials, thereby delivering advanced battery technologies at competitive prices."
Date |
Critical Mineral |
Total Amount |
Duration |
24.02 |
Lithium Concentrate |
85,000 tons |
2024 (contract extension optional) |
22.09 |
Lithium Hydroxide |
50,000 tons |
2026~2030 |
[Offtake Agreements between LG Energy Solution and WesCEF]
About LG Energy Solution
LG Energy Solution (KRX: 373220), a split-off from LG Chem, is a leading global manufacturer of lithium-ion batteries for electric vehicles, mobility, IT, and energy storage systems. With 30 years of experience in revolutionary battery technology and extensive research and development (R&D), the company is the top battery-related patent holder in the world. Its robust global network, which spans North America, Europe, Asia, and Australia, includes battery manufacturing facilities established through joint ventures with major automakers such as General Motors, Stellantis N.V., Hyundai Motor Group, and Honda Motor Co., Ltd. At the forefront of green business and sustainability, LG Energy Solution aims to achieve carbon neutral operations by 2050, while embodying the value of shared growth and promoting diverse and inclusive corporate culture. To learn more about LG Energy Solution's ideas and innovations, visit https://news.lgensol.com.
