LG Energy Solution has secured a large volume of Canadian lithium concentrate. This will strengthen its supply chain in North America from sourcing materials and supplies to battery production.
On the 8th, LG Energy Solution said it signed a long-term supply contract for lithium concentrate with North American lithium producer Elevra Lithium.
LG Energy Solution will receive a total of 240,000 tons of lithium concentrate over four years starting at the end of this year. That amount can be converted into about 30,000 tons of lithium hydroxide. It is enough to make batteries for about 700,000 high-performance electric vehicles. The lithium concentrate will be produced at the North American Lithium (NAL) mine operated by Elevra Lithium in Quebec, Canada.
Lithium concentrate is a raw material made by processing and concentrating lithium ore. Through refining, it is made into lithium carbonate and lithium hydroxide. Lithium carbonate is used in lithium iron phosphate (LFP) and ternary batteries, while lithium hydroxide is mainly used in high-performance high-nickel ternary batteries.
The battery value chain runs from "raw materials (lithium concentrate) → materials (lithium carbonate and lithium hydroxide, cathode materials) → batteries." This contract is meaningful in that it secured the very front end of the value chain in North America. With pre-processing raw materials secured, the company can respond more flexibly to demand for lithium carbonate and lithium hydroxide, which varies with conditions in the electric vehicle (EV) and energy storage system (ESS) markets.
The secured raw materials will be linked to North American production hubs. LG Energy Solution has five ESS production bases in North America, including three standalone plants—Lansing, Michigan; Holland, Michigan; and NextStar Energy Ontario, Canada—and two joint-venture plants—L-H Battery Company in Ohio with Honda and Ultium Cells in Tennessee with GM. LG Energy Solution plans to expand its North American ESS LFP battery production capacity to more than 50 gigawatt-hours (GWh) by the end of this year.
In particular, NextStar Energy in Windsor, Canada, is the first large-scale battery plant in Canada. The plant began mass production of ESS batteries in Nov. last year. LG Energy Solution plans to link Canadian raw materials with its production bases in Canada and the United States to enhance the completeness of the North American supply chain.
Lee Gang-yeol, head of procurement at LG Energy Solution (executive vice president), said, "This contract is an important achievement to strengthen the North American materials and supplies supply chain and respond to the rapidly growing North American battery market," adding, "Based on stable lithium concentrate sourcing, we will enhance the stability and flexibility of the supply chain and respond to customer demand more quickly."
