Nemaska Lithium has reached a five-year agreement to supply-battery grade lithium hydroxide to Korean chemical company LG Chem.

According to the terms of the deal, LG will receive 7,000t per year of lithium hydroxide produced at Nemaska Lithium’s commercial plant in Shawinigan in Quebec, Canada.

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Nemaska Lithium president and CEO Guy Bourassa said: “We are pleased with this first step towards establishing a long-term commercial relationship between LG and Nemaska Lithium.

“The signing of this agreement is a clear vote of confidence by LG in our business plan and our capacity to be a long-term supplier of lithium hydroxide.”

“The signing of this agreement is a clear vote of confidence by LG in our business plan and our capacity to be a long-term supplier of lithium hydroxide.”

The delivery of the supplies will begin in October 2020 and continue for five years.

Provisions in the agreement grant Nemaska Lithium the right to reschedule the commencement of the supply period. The decision to reschedule will be based on the anticipated commissioning of the Shawinigan plant.

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The latest offtake agreement comes after the company awarded the right of first offer to SoftBank Group to purchase up to 20% of production.

Nemaska Lithium has now either committed or agreed in principle for the offtake of more than 90% of its estimated 33,000 tonnes/y lithium carbonate equivalent (LCE) capacity.

In April this year, the firm signed a $150m streaming agreement with Orion Mine Finance II for the sale of 14.5% on all lithium hydroxide and lithium carbonate produced at the Shawinigan plant.

Project finances for construction, commissioning of the company’s Whabouchi lithium mine and Shawinigan electrochemical plant stand at up to $825m.

The company expects to develop a combined open pit and underground lithium mine at Whabouchi, with an estimated mine life of 33 years.

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