Australian lithium miner Vulcan Energy Resources announced on Monday (19th) that it has signed a lithium hydroxide supply agreement with LG New Energy (LG Energy Solution), a battery subsidiary of South Korea's LG Chemical, for at least five years.
As lithium is the key raw material for the manufacture of electric vehicle batteries, whoever locks the supply of lithium raw materials will be able to occupy an active position in the future market in this wave of automobile electrification. This is why LG New Energy, a global battery supplier for electric vehicles, is so eager to lock in a large-scale supply of lithium hydroxide raw materials in the future.
Under the agreement, LG Energy will purchase 5000 tons of battery-grade lithium hydroxide in the first year of the deal and 10, 000 tons annually thereafter.
Vulcan said in a statement that LG Energy will purchase these raw materials at market prices to produce battery cathodes. Its deal with LG Energy is expected to be finalised by the end of November. The initial term of the agreement is five years, which can be extended for another five years, and commercial delivery will begin in 2025.
Vulcan Energy, which aims to become the world's first lithium producer with zero carbon emissions, has planned to invest 1.7 billion euros ($2.01 billion) in Germany to mine and provide lithium resources on a carbon-neutral basis.
As countries continue to promote the process of zero-carbon emissions and tighten vehicle emission standards, zero-carbon lithium is becoming more and more attractive to automakers.
This is the first binding lithium business off-take clause of the zero-carbon lithium battery project, so it is appropriate to work with the world's largest manufacturer of electric vehicle batteries. LG New Energy's business is global and it already makes batteries in Europe. This agreement is in line with our strategy of working with primary battery manufacturers and car companies in the European market. " Francis Wedin, managing director of Vulcan, commented.
Earlier this month, sources told the media that Vulcan had signed a memorandum of understanding on lithium supply with Stellantis, the world's fourth-largest carmaker.
, Vulcan Energy shares rose 1.18% to A $9.44 in Asian trading on Monday.
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