LG Energy signs a big deal with Australian lithium miners to strive for the top spot in the global battery industry.

Australian lithium miner Liontown Resources Ltd said on Wednesday that it had signed a binding off-take agreement with South Korean battery maker LG Energy solution (LG Energy Solution, ("LGES").

The off-take agreement, which lasts for five years, is expected to begin in 2024 and can be extended for another five years when it expires. LGES will purchase 100000 dry tons of spodumene concentrate (weight of DMT, after deducting moisture) from Liontown's Kathleen Valley project in the first year and increase it to 150000 dry tons per year in subsequent years.

The agreement is the first deal for the Kathleen Valley project in western Australia, valued at about A $473 million (US $340 million), Liontown said in a statement. Liontown revealed that the agreement with LGES supported the project, and LGES's orders accounted for nearly 30 per cent of its production in its first year of production.

Liontown said in a statement that the company is still negotiating with a number of top customers to build a diversified portfolio of high-quality customers to establish a position in the global battery value chain. Liontown said it had received "strong interest in the long-term off-take agreement for the Kathleen Valley project" but did not provide further details.

LGES

Liontown stressed that the agreement with LGES is a milestone because LGES is in the "first echelon" of the battery industry, with customers including Tesla and General Motors, which can be said to be the center stage for electric vehicles.

LGES is the world's second-largest battery maker after Ningde, according to SNE Research, an energy market research firm. In the 11 months to November 2021, the South Korean company had a market share of 22 per cent, compared with 29 per cent for Ningde Times.

At an online press conference held by LGES executives yesterday, Kwon Young-soo, vice president and chief executive of LGES, stressed: "We have a wider range of customers, not only in China, but also in the United States and Europe, and we are expected to have a larger global market share than in the Ningde era."

It is worth mentioning that LGES began roadshow and bookkeeping last Monday and plans to launch trading on the Korean Stock Exchange on January 27th. According to the IPO terms obtained by the media, LGES could raise a total of US $10.8 billion, making it the largest IPO in South Korea's history.

If the fundraising is completed in that price range, LGES will be valued at $51 billion to $59 billion.