LG Energy Solution to Buy $2 Billion Worth of Lithium Carbonate from the U.S., Produce Batteries with Local Materials

[Financial News] LG Energy Solution, which operates three battery plants in the United States, has signed a 10-year contract to purchase a key battery material, lithium carbonate, mined in the U.S. The deal is worth about 2 trillion won.
According to the Arkansas state government and LG Energy Solution's website on the 31st of last month local time, the company signed a $1.5 billion deal, or about 2.0534 trillion won, with Smackover Lithium. Under the agreement, it will receive 8,000 tons of battery-grade lithium carbonate a year for 10 years starting in 2029.
Smackover Lithium is a joint venture between Norwegian oil driller Equinor and Canada's Standard Lithium Ltd. It plans to extract key minerals from limestone layers beneath Arkansas pine forests. 
David Park, CEO of Standard Lithium Ltd., said, "We are pleased to sign this agreement with LG Energy Solution, one of the world's leading battery manufacturers, with a diverse and global customer base and exposure to several dynamic and growing industry sectors." He added, "We expect this deal to mark the beginning of a long-term, mutually beneficial partnership, through which we will supply LG Energy Solution with battery-grade lithium carbonate produced sustainably in the United States for many years."
Lithium carbonate, along with iron phosphate, is a key raw material used to make lithium iron phosphate (LFP) battery cathodes. Lithium batteries are also drawing attention as backup power sources for energy-hungry Artificial Intelligence (AI) data centers. Park added, "LG Energy Solution is eager to expand beyond electric vehicles, the traditional market for lithium batteries, into the AI sector as well."
LG Energy Solution currently operates seven production facilities in the United States, including three battery plants, and the latest deal will help it build a local supply chain that integrates everything from raw material sourcing to production. The company said, "This agreement is a step toward building a robust and resilient supply chain needed to maintain product competitiveness." It added that the deal will allow it to integrate both battery material procurement and production in the U.S., and that it will "offer competitive products to leading customers in the global energy storage and electric vehicle markets." Sarah Huckabee Sanders, Governor of Arkansas, said lithium is creating economic opportunities and added, "I am glad Arkansas can help replace China's supply chain with our own supply chain built right here in Arkansas."
Most of the lithium used in the United States is produced in Chile and Argentina, then processed in China before being imported. Under this deal, LG Energy Solution will be able to make batteries in the U.S. using lithium carbonate produced and refined in Arkansas, which also aligns with the Trump administration's policy of localizing supply chains.
[email protected] Park Jong-won Reporter