LG Energy Solution Secures 10 Years of U.S.-Produced Lithium Carbonate in Arkansas in Long-Term Deal Worth 2 Trillion Won

[Financial News] LG Energy Solution has secured a large volume of lithium carbonate, a key battery material produced in the United States.
LG Energy Solution disclosed on the 1st that it had signed a long-term purchase agreement for lithium carbonate with U.S. lithium developer Smackover Lithium.
Under the deal, LG Energy Solution will receive 8,000 tons of lithium carbonate a year for 10 years starting in 2029, when Smackover Lithium begins commercial production, for a total of 80,000 tons. That is enough to produce about 1.8 million high-performance electric vehicles with a driving range of more than 500 kilometers per charge. Industry sources said the transaction is valued at about $1.5 billion, or roughly 205.34 billion won.
Smackover Lithium, which will supply the material, is a joint venture established by Canada's Standard Lithium and Norwegian state-owned energy company Equinor. The company plans to extract lithium in its southwestern Arkansas project using direct lithium extraction (DLE), a method that reduces carbon emissions.
The background to the deal is the rapid growth of the North American Energy Storage System (ESS) market. As demand for LFP battery materials rises, securing a stable local source of raw materials has become urgent. Lithium carbonate is an essential material used in both LFP and ternary batteries, and together with lithium hydroxide, which is mainly used in high-nickel batteries, it is considered one of the two core minerals in the battery industry.
The company expects that securing raw materials mined locally through eco-friendly methods in the United States will also help it meet the tax credit requirements under the Inflation Reduction Act (IRA). LG Energy Solution, which currently operates eight production plants in North America, said the deal will further strengthen its supply chain, from raw material procurement to cell production, within the United States.
David Park, CEO of Standard Lithium, said, "It is meaningful to sign a deal with LG Energy Solution, a world-class battery company," and added, "We will build a partnership that grows together by providing a stable supply of U.S.-produced lithium carbonate."
Lee Kang-yeol, head of LG Energy Solution's procurement center and executive vice president, said, "This is an achievement that strengthens supply chain stability by securing eco-friendly key minerals in the strategic North American market," and added, "We will continue to enhance product competitiveness through local production and procurement."
Meanwhile, LG Energy Solution previously signed a 100,000-ton lithium hydroxide and lithium carbonate deal with SQM, the world's largest lithium producer in Chile, and a 1.75 million-ton lithium concentrate deal with Liontown in Australia.
[email protected] Kim Dong-chan Reporter