SMM8 22 August 2019, Tianqi Lithium Industry Co., Ltd. (hereinafter referred to as "Company" or "Tianqi Lithium Industry") wholly owned subsidiary TianqiLithiumKwinanaPtyLtd (hereinafter referred to as "TLK") and LGChem,Ltd (hereinafter referred to as "LG Chemistry") signed SupplyAgreement (hereinafter referred to as "long-term supply Agreement" or Agreement).
The signing of the "long-term supply Agreement" agreed that TLK to LG chemical sales of lithium hydroxide, sales unit price to be determined by both parties; the sales quantity includes the base quantity and additional quantity, the additional quantity will be determined by the buyer and the seller after notice according to their own needs, the amount shall be subject to the final actual settlement. The lithium hydroxide plant of TLK, a wholly owned subsidiary of the company, will supply the battery-grade lithium hydroxide products mentioned in the agreement. According to the current commissioning progress of the TLK lithium hydroxide project, the company is confident that it will fulfill all the provisions of the completion agreement. The "long-term supply Agreement" stipulates that the sales quantity of lithium hydroxide products in a single year is not less than 15% of the annual production capacity of the TLK lithium hydroxide project, which further indicates that the goal of signing long-term contracts with major international customers in the industry has been carried out as planned. The agreement is valid from 2020 to 2022. Subject to mutual agreement and negotiation of the price and quantity by September 30, 2022, the agreement may be extended for a period of three years from January 1, 2023. If the two parties cannot agree on the price and quantity, the agreement will expire on December 31, 2022. TLK and LG Chemical signed the "long-term supply Agreement", which will recognize revenue in 2020-2022 according to the performance of the contract, have a positive impact on the company's operating performance in the above year, help to enhance the sustainable profitability of the company, and is conducive to the long-term development of the company.
LG Chemical is a Korean listed company, listed on the Korean Stock Exchange code 051910, belonging to the Korean LG Group. LG Chemical is the largest integrated chemical enterprise in South Korea and one of the largest lithium battery manufacturers in the world. LG Chemical has invested in a number of power battery production bases in South Korea, the United States, China and Poland.
LG Chemical and Tianqi Lithium Industry has established a good long-term business partnership, good credit status, operating conditions and ability to pay, with a good reputation and performance ability. In 2018, the amount of transactions between Tianqi lithium industry and overseas cathode materials and battery manufacturers was 635.664 million yuan, accounting for 10.18 per cent of the company's operating income in that year.
