LG Energy Solution has entered into a binding offtake agreement with Smackover Lithium for 8,000t of battery-quality lithium carbonate.
Smackover, a joint venture between Standard Lithium, which holds a 55% stake, and Equinor, holding 45%, will supply lithium carbonate to LG Energy Solution every year over the next ten years.
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The lithium carbonate will be sourced from the South West Arkansas (SWA) Project and produced in the US.
The deal will enable LG Energy Solution to build a fully integrated local supply chain for its battery production processes, which include multiple manufacturing facilities across the US.
Most of these facilities already have production capacity focused on lithium iron phosphate battery chemistry.
The lithium carbonate from the SWA Project will be produced using a direct lithium extraction (DLE) and purification process.
This approach is intended to achieve a more sustainable method of sourcing the material.
Standard Lithium CEO David Park said: “We are excited to be entering into this agreement with LG Energy Solution, one of the world’s leading battery producers with a diverse and global customer base and a presence in many dynamic and growing industry segments.
“We expect this to be the beginning of a long and mutually beneficial partnership whereby we will provide LG Energy Solution with a long-term supply of US-based and sustainably produced battery-quality lithium carbonate.”
Demand for power storage systems in North America is increasing and battery manufacturers are prioritising the procurement of stable supplies of materials from within the region.
The agreement aligns with LG Energy Solution’s strategy to secure essential raw materials for battery manufacturing and to diversify its supplier base by region.
The contract also supports the company in meeting non-Prohibited Foreign Entity requirements for cathode materials in its batteries.
The SWA Project is situated around 24km west of Magnolia in Columbia County and 11km south of Lewisville in Lafayette County.
