LG Chem has signed agreements with Piedmont Lithium, a US-based lithium developer, to make an equity investment of $75m in the latter.
Besides, the South Korean chemical company has agreed to the offtake of 200,000 metric tonnes of spodumene concentrate (SC6) from Piedmont Lithium’s North American lithium project in Québec, Canada. Piedmont Lithium co-owns the lithium project with Sayona Mining.
The offtake agreement will be over a period of four years, beginning at the date of loading the first shipment. Both parties can mutually extend the term of the agreement for any number of additional years.
As per the terms of the agreement, LG Chem will pay nearly a price of $68.4 per share to purchase 1,096,535 newly-issued shares of Piedmont Lithium, which is publicly listed in the US and Australia. This will allow LG Chem to acquire a stake of nearly 5.7% in the lithium developer.
Piedmont Lithium president and CEO Keith Phillips said: “We welcome LG Chem as a shareholder in Piedmont and are excited to partner with them to supply North American lithium that will meet the requirements of the IRA and support the development of the US battery supply chain.
“LG Chem is a global leader with a commitment to US EV battery manufacturing and plans to build one of the world’s largest cathode plants in Clarksville, Tennessee. We look forward to working with LG Chem as NAL comes online as an important source of lithium in North America.”
Piedmont Lithium will deliver 50,000 metric tonnes of spodumene concentrate per year to LG Chem. The spodumene concentrate shipments are expected to commence in Q3 2023.
The company has also committed to giving LG Chem priority negotiation rights for 10,000 metric tonnes per year of lithium hydroxide that it produces at either of its proposed facilities in Tennessee or North Carolina in the US.
LG Chem expects to use the material to support its plans to produce cathode materials for important North American customers and the intentions of the Inflation Reduction Act of 2022.
LG Chem vice chairman and CEO Hak-Cheol Shin said: “This agreement allows LG Chem to provide differentiated values to North American customers with products that satisfy IRA standards by preemptively securing raw materials in the US, our key market.
“As we work to build various partnerships, including joint metal investments with automotive OEMs and battery makers, we’re pleased that our partnership with and commitment of funds to Piedmont will help support its development of US lithium projects.”
The funding from LG Chem is expected to help Piedmont Lithium to advance its portfolio of projects and for general corporate purposes.
Its projects include the fully integrated Carolina lithium project being developed in North Carolina, the Ewoyaa lithium project in Ghana in partnership with Atlantic Lithium, and the planned 30,000 metric tonnes per year lithium hydroxide project at Tennessee Lithium.
