This undated handout photo shows a mining site of North American Lithium (NAL) in Quebec, Canada. LG Chem said February 17 that it has acquired a 5.7 percent stake in U.S.-based Piedmont Lithium, which partly owns NAL. Through the investment deal, LG can secure a stable supply of lithium needed to produce electric vehicle batteries. [Courtesy of LG Chem]
LG said that the contract is aimed at securing a stable supply of lithium, a key material for the production of electric vehicle batteries.
Through the investment, LG Chem has won rights to preferential negotiations with Piedmont for the purchase of 10,000 tons of lithium hydroxide needed to manufacture EV batteries.
The stake acquisition is part of LG's efforts to cope with the Inflation Reduction Act (IRA) which was signed into law by U.S. President Joe Biden in August 2022 to exclude batteries made of Chinese minerals from tax incentives.
LG said the company has also signed a contract to buy 200,000 metric tons of spodumene concentrates from Piedmont's jointly-owned North American Lithium (NAL) for four years from the third quarter of this year. The material will be processed to extract about 30,000 tons of lithium that can be used to make 500,000 EV batteries.
LG has become the first Korean company to secure the supply of lithium from North America.
The firm said Piedmont owns a 25 percent stake in the NAL which has a spodumene mine in Quebec, Canada. The mine is known to be the only one in North American that can dig out the mineral for commercial use, according to LG.
"We aim to secure raw materials in advance in the United States, one of our key markets, in order to provide our clients with products that can meet the IRA requirements," a company official said.
reporter
Park Yoon-bae
ktybpark@ajunews.com
