LG Energy Solution Secures 100,000 Tons of Lithium from Chile's SQM... Enough for 2 Million Electric Vehicles

IRA Requirement Met
Includes Lithium Carbonate for LFP

LG Energy Solution has succeeded in securing a large-scale lithium supply to strengthen its supply chain in the North American market.

LG Energy Solution announced on the 7th that it has signed a long-term lithium purchase contract for 100,000 tons over seven years with SQM, the world's largest lithium producer based in Chile. This is the largest single lithium purchase contract to date. The quantity is enough to manufacture batteries for more than 2 million high-performance pure electric vehicles. The supply period is from this year until 2029.

This contract replaces the agreement LG Energy Solution signed with SQM in 2020. To proactively respond to the rapidly increasing global battery demand, the remaining seven-year quantity of 36,000 tons has been expanded nearly threefold.

On April 19th, an employee stirring lithium at the SQM processing plant in Chile. [Image source=AP Yonhap News]

LG Energy Solution will receive not only lithium hydroxide, used as a raw material for 'high-nickel high-capacity electric vehicle batteries,' but also lithium carbonate, mainly used in 'low-nickel and lithium iron phosphate (LFP) batteries.' Previously, LG Energy Solution announced plans to build an independent cylindrical battery production plant (27GWh) in Queen Creek, Arizona, USA, along with an ESS LFP battery production plant with a capacity of 16GWh.

SQM, headquartered in Santiago, Chile, owns lithium mines in Chile and Australia, countries that have free trade agreements (FTA) with the United States, enabling compliance with the Inflation Reduction Act (IRA) requirements. They also have eco-friendly technology, using more than 95% solar energy in the lithium extraction process.

LG Energy Solution Raw Material Procurement Information
[Image source=LG Energy Solution]

The two companies plan to expand their strategic partnership in the future to enhance cooperation related to lithium production and supply in North America and Asia.

Kim Myunghwan, CPO (Chief Production and Purchasing Officer) of LG Energy Solution, said, “We have strengthened the supply stability of lithium, a key battery mineral, and can respond to the IRA through supply chain diversification. Based on differentiated raw material supply stability and unrivaled product competitiveness, we will provide the world’s best customer value.”

Carlos Diaz, Vice President of SQM, said, “We appreciate LG Energy Solution’s trust in SQM’s capabilities and will continue to strengthen our partnership to contribute to global decarbonization.”

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