South Korea’s LG Energy Solution (373220.KS) has inked its second offtake agreement with Australia’s Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) (WES.AX) on Tuesday, in a move aimed at bolstering its lithium procurement capabilities.
This initiative signifies the company’s commitment to ensuring a steady and reliable supply of lithium, a crucial component widely utilized in rechargeable lithium-ion batteries across various industries, including smartphones, laptops, electric vehicles, and grid-scale energy storage systems.
Under the terms of the collaboration, WesCEF will provide LG Energy with 85,000 tons of lithium concentrate, which can be utilized to produce approximately 11,000 tons of lithium hydroxide. This agreement follows LG Energy’s previous deal for 50,000 tons of WesCEF’s battery-grade lithium hydroxide in 2022.
WesCEF’s lithium hydroxide will be derived from the Mt. Holland lithium project in Western Australia, presently under construction and slated to commence operations by the first half of 2025.
LG Energy’s latest strategic move in securing its lithium supply chain comes on the heels of its announcement last week regarding plans to expand its presence in India’s passenger vehicle market. The company’s India unit, a major supplier of battery cells to domestic electric scooter manufacturers such as SoftBank Group (9984.T)-backed Ola Electric (OLAE.NS) and domestic rival TVS (TVSM.NS), aims to consolidate its foothold in the burgeoning market.
In 2023, LG Energy forged a supply agreement with Chile’s SQM (SQMA.SN), securing access to 100,000 tons of lithium over a seven-year period.