LG Energy Solution is joining hands with a U.S. lithium-focused developer to bolster a local critical minerals supply chain in North America.
LG Energy Solution said on the 1st that it signed a long-term lithium carbonate supply contract with U.S.-based Smackover Lithium. Smackover Lithium is a joint venture established by Standard Lithium and Equinor, a Norwegian state-owned energy company.
LG Energy Solution is set to receive a total of 80,000 tons of lithium carbonate over 10 years starting in 2029, when Smackover Lithium begins full-scale mass production. That is enough to produce about 1.8 million high-performance electric vehicles that can travel more than 500 kilometers on a single charge.
Smackover Lithium plans to produce high-quality lithium carbonate in an eco-friendly way that minimizes carbon emissions by applying direct lithium extraction (DLE) technology to the "Southwest Arkansas Project" underway in Arkansas.
The deal was pursued to preemptively respond to surging lithium carbonate demand as the energy storage system (ESS) market rapidly expands amid rising power demand in North America, making the local supply of key cathode materials for batteries such as lithium iron phosphate (LFP) a core task.
Lithium carbonate is used as a key raw material for LFP and nickel-based ternary batteries. Along with lithium hydroxide, which is mainly used in high-performance nickel-rich ternary batteries, lithium carbonate is considered a critical mineral driving the electric vehicle and energy transition markets.
By securing a stable U.S. supply chain that uses an eco-friendly process based on direct lithium extraction technology, LG Energy Solution expects not only to meet eligibility requirements under the Inflation Reduction Act (IRA), but also to strengthen supply chain competitiveness and ESG competitiveness in the North American market at the same time.
David Park, CEO of Standard Lithium, said, "It is very meaningful to sign this agreement with LG Energy Solution, a global battery manufacturer," adding, "By supplying U.S.-made lithium carbonate to LG Energy Solution in a long-term and sustainable way, we expect to build a strong partnership for joint growth."
Lee Kang-yeol, head of procurement at LG Energy Solution (executive vice president), said, "This partnership with Smackover Lithium is a meaningful achievement that has enhanced supply chain stability by securing critical minerals produced in an eco-friendly manner in the strategic North American market," adding, "Through local U.S. production and procurement of materials and supplies, we will deliver more competitive and sustainable products."