LG Energy Solution locks in battery materials for 6 years
LG Energy Solution signed a deal with Australian Mines to source nickel and cobalt, core materials for batteries.
Under the deal, Australian Mines will supply 71,000 tons of nickel and 7,000 tons of cobalt to the Korean battery maker for six years starting the second half of 2024.
The materials will be enough to produce batteries that can power 1.3 million high-performance electric vehicles (EVs), LG Energy Solution said Monday. High-performance electric vehicles refers to cars that can run more than 500 kilometers (311 miles) on a single charge.
Founded in 2001, Australian Mines has been pushing the Sconi Project, which aims to extract nickel and cobalt in eco-friendly ways. The company is currently building a plant in Greenvale, North Queensland, and construction is expected to be complete in 2024.
During the mining, Australian Mines will be using a dry stacking method, which is considered more sustainable. The process costs more than conventional methods but is environmentally friendly.
With a six-year supply deal, LG Energy Solution says it will gain an upper hand in securing a "stable supply of the core raw materials of EV batteries.”
“With the growing EV market, securing raw materials and managing the supply chain have become important for business competitiveness among battery companies,” said LG Energy Solution CEO Kim Jong-hyun. “LG Energy Solution will strengthen its leading position in the global battery market by having a stable supply chain of raw materials.”
In June, the wholly owned subsidiary of LG Chem bought 7.5 percent of Australia-based battery materials company Queensland Pacific Metals (QPM) for 12 billion won ($10.3 million). QPM will supply LG Energy Solution with 7,000 tons of nickel and 700 tons of cobalt annually for 10 years from the end of 2023.
BY SARAH CHEA [firstname.lastname@example.org]