Australian Mines has signed an offtake agreement with battery producer LG Energy Solutions (LGES) for mixed nickel-cobalt hydroxide from the Sconi Project in North Queensland, Australia.
Under the initial term of the binding agreement, LG Chem subsidiary LGES will purchase 71,000 dry metric tonnes (dmt) of nickel and 7,000dmt of cobalt in the form of a mixed hydroxide precipitate (MHP) from the project.
This represents 100% of the anticipated production at the Sconi project.
MHP is a nickel and cobalt-containing intermediate product that can be used as a raw material for the production of lithium-ion batteries.
Effective from the end of 2024, the agreement is expected to help LG Energy address the increasing concerns about future raw material supplies.
The supply agreement has an initial six-year term and may be extended for a further five years by mutual agreement.
LG Energy Solution president and CEO Jong-hyun Kim said: “Securing key raw materials and a responsible battery supply chain has become a critical element in gaining a greater control within the industry, as the demand for electric vehicles worldwide heightened in recent years.”
The agreement is conditional on Australian Mines securing construction funding for the Sconi project by 30 June 2022.
In a press statement, LG Energy said: “The six-year supply deal would translate to producing batteries that can power 1.3 million high-performance electric vehicles, with a driving range surpassing 500km on a single charge.”
The Sconi nickel and cobalt mine is being developed with a $1.5bn investment.