Queensland Pacific Metals (QPM) has signed an investment and offtake deal with battery maker LG Energy Solution (LGES) and steel producer POSCO.

LGES and POSCO, both South Korean firms, have agreed to invest a total of $15m (A$19.3m) in electric vehicle (EV) battery material supplier QPM through ordinary shares subscription at A$0.1364 apiece.

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LGES and POSCO will respectively invest $10.5m and $4.5m for QPM shares. This will offer LGES a 7.5% stake in the Australian company while POSCO will hold a 3.2% interest.

QPM plans to use the capital to advance The Townsville Energy Chemicals Hub (TECH) project.

The TECH project is developed to produce battery chemicals, including nickel sulfate, cobalt sulfate, and high purity alumina and other byproducts by processing high-grade ore imported from New Caledonia.

According to the binding offtake agreements, QPM will sell 10,000t contained nickel and 1,000t contained cobalt to LG Energy Solution and POSCO.

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QPM plans to supply nickel and cobalt from the TECH Project in the form of mixed hydroxide precipitate (MHP) until the project completes the commercial production certification process.

Upon completion of the certification process, the firm will undertake sales in the form of nickel sulfate and cobalt sulfate.

In a press statement, QPM said: “LGES and POSCO are both highly credible and bankable counterparties, which will significantly assist QPM’s ability to fund the TECH Project.

“Their combined offtake quantities will account for the majority of production at the TECH Project, giving QPM the baseload customers it needs to underpin development. Harp Capital of Toronto acted as adviser to QPM on the transaction.”