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LG Energy signs second offtake agreement with WesCEF to secure stable supply of lithium

LG Energy Solutions, one of the leading producers of lithium-ion batteries for automotive, IT, and energy storage systems on Wednesday announced that it has signed an offtake agreement with Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) to secure a stable supply of lithium for its North American market.

Under the agreement, WesCEF will supply LG Energy Solution with 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. This is the second offtake agreement signed between the two companies, with the first signed in 2022, for securing a total of 50,000 tons of battery-grade lithium hydroxide from WesCEF for a period of five years.

"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 the 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."

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 production at the Mt. Holland lithium project is expected to begin in the first half of the calendar year 2025.

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 an investor in the Mt. Holland lithium project. SQM and LG Energy signed a new long-term supply agreement for lithium carbonate and lithium hydroxide last year, which superseded the previous one in force. This new offtake amount nearly tripled from the remaining contract volume (36,000 tons) to 100,000 tons over seven years, ensuring a more stable supply of IRA-compliant lithium to drive LG Energy's business expansion into the North American market.

The critical minerals and raw materials secured through these robust supply chains will be assembled into 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 said in a statement.

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South Korea announces $29 billion to help its battery companies 'reduce foreign dependence' -  

South Korea on Wednesday announced plans to provide $29 billion in financing over the next five years to strengthen its battery industry and reduce reliance on foreign nations for materials. A joint release issued by multiple ministries said the country would offer tax incentives and loan support for South Korean companies acquiring rights for minerals and other battery materials overseas, while increasing financial support for companies that refine and re-use such minerals.
Author : Shraddha Kakade
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