Queensland Pacific Metals (QPM) has secured $15m combined equity investment from LG Energy Solution (LGES) and POSCO to advance its Townsville Energy Chemicals Hub (TECH) project in Australia.

The South Korean firms will make the investment the electric vehicle (EV) battery material supplier by subscribing its ordinary shares at A$0.1364($0.11) each.

LGES will make an investment of $10.5m in QPM, while POSCO GEM 1ST FUND will invest $4.5m.

Upon completion of the transaction, LGES and POSCO will own stakes a 7.5% and 3.2% in the Australian company, respectively. The investment made by LGES and POSCO GEM 1ST FUND is subject to QPM shareholder approval.

QPM plans to utilise the funds to advance detailed design work for the TECH project for early placement of long-lead time plant and equipment.

The project will supply critical chemicals for the emerging lithium ion battery and electric vehicle sector.

It is expected to produce nickel and cobalt sulfate in 2023, by processing high-grade ore imported from New Caledonia.

In addition, QPM has entered into binding offtake agreements with LGES and POSCO for the supply of nickel and cobalt from the project.

QPM stated: “The execution of the offtake agreements is a major milestone for QPM and the TECH Project. LGES and POSCO are both highly credible and bankable counterparties, which will significantly assist QPM’s ability to fund the TECH Project.”

“Their combined offtake quantities will account for the majority of production at the TECH Project, giving QPM the baseload customers it needs to underpin development.”

Under the offtake agreement, the company will supply 7,000t contained nickel per annum and 700t contained cobalt per annum to LGES.

QPM will sell 3,000t contained nickel per annum and 300t contained cobalt per annum to POSCO.

LGES Global SCM Center leader Dongsoo Kim said: “This is the most meaningful investment in our supply chain for LG Energy Solution since the company spun out from LG Chem.

“We believe the TECH Project will deliver sustainable nickel and cobalt production that is in line with LGES’ operating philosophy. And our proactive investments in the supply chain such as this will ultimately play a role in further satisfying our customers.”