South Korea’s LG Energy Solution Ltd. has secured a long-term supply of cobalt sulphate from Canada, enhancing its presence in the North American market supply chain.

Electra Battery Materials Corp., a Canadian multinational corporation engaged in mining and refining raw materials for electric batteries, announced Monday that it has signed an agreement with LG Energy Solution for long-term supply of cobalt sulphate.

Cobalt sulphate is a crucial raw material for high-performance and high-capacity EV batteries.

Under the agreement, LG Energy Solution will receive 19,000 tons of cobalt sulphate from Electra over a five-year period, starting from 2025 until 2029. This new agreement is an upgraded contract in supply period and quantity, following a previous deal between the two companies last September.

As per the revised agreement, Electra will be providing LG Energy Solutions with a total of 19,000 tons of cobalt, contained in cobalt sulfate products, over the course of five years. In 2025, LG Energy Solution will receive 3,000 tons, followed by an annual supply of 4,000 tons from 2026 through 2029. The pricing for this supply will be based on a mutually agreed-upon mechanism.

Previously, the arrangement between Electra and LG Energy Solution entailed the supply of 7,000 tons of contained cobalt in cobalt sulfate products over a three-year period, commencing from the current year.

However, with the updated terms, the supply quantity has been significantly increased, spanning a more extended timeframe, to meet LG Energy Solution’s future cobalt requirements.

“LG Energy Solution continues to strengthen its position as a global leader in the electric vehicle supply chain through its investments in Ontario and active collaboration with Canadian companies developing critical minerals and battery materials,” said Trent Mell, CEO of Electra.

Electra, the only cobalt sulphate refining company in North America, plans to produce cobalt sulphate at a refinery scheduled to be completed for operation in Ontario. The company aims to minimize carbon emissions during the refining process by utilizing eco-friendly energy sources such as solar power.

This agreement enables LG Energy Solution to reliably supply critical minerals that meet the Inflation Reduction Act (IRA) incentive conditions to its battery manufacturing plants in North America. Additionally, the diversification of the supply chain reduces LG Energy Solution’s dependency on cobalt supplies from China.

According to research by CRU, China is currently responsible for 71 percent of refined cobalt used in EV batteries.

In response to the IRA, LG Energy Solution is enhancing strategic partnerships with mining and processing companies to secure essential battery raw materials.

On July 3, the company signed a 7-year contract with SQM in Chile, the world’s largest lithium producer, for the supply of 100,000 tons of lithium until 2029.

By Pulse

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