LG Energy Solution Establishes Supply Chain for Core Materials of High-Capacity Batteries

Supply Contract for 45,000 Tons of Lithium Hydroxide with Dokbeolkan Energy

[Asia Economy Reporter Oh Hyung-gil] LG Energy Solution announced on the 31st that it has signed a supply contract for lithium hydroxide, a key raw material for high-capacity electric vehicle batteries, with German company Vulcan Energy to establish a stable supply system.

This is the first time LG Energy Solution has signed a supply contract with a European lithium producer, and it plans to receive 45,000 tons of lithium hydroxide over five years from 2025 to 2029. This amount is enough to manufacture batteries for approximately 1.1 million high-performance electric vehicles capable of driving over 500 km on a single charge.

Lithium hydroxide is used as a raw material for high-capacity electric vehicle batteries that require high performance because it easily synthesizes with nickel, a key raw material for cathode materials. As the nickel content in batteries increases, energy density rises and the driving range per charge extends, leading to a growing trend among automakers to choose "high-nickel batteries."

LG Energy Solution explained that this contract not only enables stable supply of lithium hydroxide, a key raw material for batteries, but also allows the company to secure ESG (environmental, social, and governance) competitiveness during the raw material supply chain establishment process.

Vulcan Energy is an energy and mineral company conducting a project that combines geothermal power generation with lithium hydroxide production. It uses the DLE method to directly extract lithium from geothermal brine (hot underground water containing lithium) linked to geothermal power generation, and utilizes waste heat as an energy source, resulting in lower carbon emissions compared to existing lithium producers.

So far, LG Energy Solution has signed a long-term supply contract with Chilean SQM, one of the world's largest lithium producers, until 2029, and has also established mid- to long-term supply contracts with overseas mining companies producing lithium concentrate (raw material for lithium hydroxide) such as Sigma Lithium and Liontown.

An LG Energy Solution official said, "Through the contract with Vulcan Energy, which produces lithium in an eco-friendly way, we expect a twofold effect of diversifying raw material supply sources and strengthening ESG competitiveness. Even if unpredictable supply risks arise, we will continuously diversify our supply chain system to ensure stable raw material supply."

This content was produced with the assistance of AI translation services.