LG Energy Solution (LGES) announced that it is diversifying its supply chain by joining forces with US-based lithium provider, Compass Minerals. The two signed a non-binding Memorandum of Understanding (MOU) under which Compass Minerals would supply LGES with as much as 40% of the company’s planned annual phase-one lithium carbonate and lithium hydroxide production from its lithium brine development project at its Ogden, Utah facility. Per the terms of the MOU, Compass Minerals would commit for seven years, starting in 2025, with an option to add more once the development project is complete.
LG’s energy solution business provides battery solutions for electric vehicles and hybrids, mobile battery solutions for power tools and IT equipment, and energy storage solutions for grid-scale, commercial, and residential batteries. Its residential battery, the LG Chem, has held a significant market share position in the United States for several years.
Compass Minerals reported that it is pursuing the development of an approximately 2.4 mMT lithium resource on the Great Salt Lake in Utah, at its Ogden facility.
“Our lithium vision is to support the North American battery market by accelerating the development of a sustainable and secure domestic lithium supply chain,” said Chris Yandell, head of lithium for Compass Minerals. “Entering into this commercial relationship with a proven manufacturing leader like LGES will help enable that vision, as well as assist LGES in solidifying its U.S. supply chain.”
Compass Minerals is the first US-based lithium producer to partner with LGES, and the MoU comes at a critical time with the Biden Administration looks to strengthen the US supply chain and manufacturing capabilities.
“Securing key raw materials has become critically important, in order to maintain our lead position in the global battery market,” said Dongsoo Kim, Senior Vice President of Procurement Center at LG Energy Solution. “LGES will make sure to support establishment of steady supply chain in North America, while it continues to seek and acquire environmentally friendly produced battery-grade lithium worldwide.”
Previously, LGES had agreed to purchase up to 150,000 tonnes a year of North American made battery-grade lithium as part of a six-year “take-or-pay” agreement from the Vancouver-based Sigma Lithium in October of last year.
LGES is manufacturing batteries in a plant in Holland, Michigan, with double-digit gigawatt-scale production lines being added to the facility, according to Jorg Jurgens, director of energy storage systems. This adds on to an earlier announcement from LG that it is investing $1.7 billion to increase the production capacity for battery cells and packs fivefold from 5 GWh to 25 GWh at its Michigan plant.
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