LG Chem Locks North American Material Supply

Recently, South Korean battery manufacturer LG Chem announced that it has signed a US$75 million equity investment agreement with Piedmont, an American lithium mining company, aiming to obtain a stable supply of key materials for electric vehicle batteries.

Under one of the agreements, LG Chem will purchase 1,096,500 common shares of Piedmont at $68.40 each, for a total of $75 million. After the equity investment, LG Chem will hold 5.7% of Piedmont's common stock. In addition, the two parties also signed an agreement that Piedmont's joint venture North American Lithium will supply 200,000 tons of spodumene concentrate to LG Chem per year within four years, with shipments scheduled to begin in the third quarter of this year. Piedmont will also provide LG Chem with the right of first negotiation for 10,000 tons of lithium hydroxide per year.

LG Chem said it could extract about 30,000 tons of lithium from 200,000 tons of spodumene concentrate, about the amount used to produce batteries for 500,000 electric vehicles. The agreement will allow LG Chem to meet the requirements of the U.S. Inflation Reduction Act. The cooperation between the two parties will also allow LG Chem to secure the supply of raw materials in the United States, its main market, and to provide its North American customers with products that meet the standards of the Inflation Reduction Act.

Keith Phillips, CEO of Piedmont, believes that this cooperation can also support the development of the US battery supply chain. Piedmont plans to use LG Chem's funding to advance its portfolio of projects, including a 30,000-ton-per-year lithium hydroxide project in Tennessee, Ewoyaa Lithium, a joint project with Atlantic Lithium, and a lithium project in North Carolina.