LG Energy Solution said on Thursday it signed a long-term lithium concentrate supply agreement with North American lithium producer Elevra Lithium. It will receive a total of 240,000 tonnes over 4 years starting at the end of this year. The material will be produced at the North American Lithium (NAL) mine operated by Elevra Lithium in Quebec, Canada. LG Energy Solution said the volume is equivalent to about 30,000 tonnes of lithium hydroxide, enough to make batteries for about 700,000 high-performance electric vehicles.

Lithium concentrate is a raw material produced by processing and concentrating lithium ore. After refining, it becomes lithium carbonate and lithium hydroxide. Lithium carbonate is used in LFP and ternary batteries, while lithium hydroxide is mainly used in high-performance high-nickel ternary batteries. The company has secured the earliest-stage raw material in the value chain that runs from lithium concentrate to materials such as lithium carbonate and lithium hydroxide and cathode materials, and then to batteries, in North America.

With access to materials before processing, it has more room to respond to changes in demand. Depending on market conditions for electric vehicles (EVs) and energy storage systems (ESS), it can shift to whichever of lithium carbonate and lithium hydroxide is needed. The company expects this flexibility to help its supply chain operations.

In North America, demand for ESS is rising rapidly due to the expansion of AI data centers and the spread of renewable energy. To respond, LG Energy Solution operates 3 wholly owned plants, including its Lansing and Holland plants in Michigan and the NextStar Energy plant in Ontario, Canada. Including its Ohio joint venture with Honda, L-H Battery Company, and its Tennessee joint venture with GM, Ultium Cells, it has 5 ESS production bases in North America. It plans to increase LFP battery production capacity for ESS in North America to more than 50 GWh by the end of this year.

Through Vertech, its North American ESS system integration (SI) unit, it provides ESS solutions that cover system integration in addition to cell supply. NextStar Energy in Windsor, Canada, is Canada's first large-scale battery plant and began mass production of ESS batteries in November last year. LG Energy Solution plans to link Canadian raw materials with its production bases in Canada and the United States to increase the completeness of its intra-regional supply chain in North America.

Lucas Dow (루카스 다우), CEO of Elevra Lithium, said, "This contract is an important milestone for advancing our growth strategy," and added, "Based on cooperation with LG Energy Solution, we will strengthen our business competitiveness and pursue expanded production."

Kang-yeol Lee (이강열), head of the Purchasing Center at LG Energy Solution and an executive director, said, "This contract is an important achievement to strengthen the North American raw materials supply chain and respond to the rapidly growing North American battery market," and added, "Based on a stable supply and demand of lithium concentrate, we will enhance the stability and flexibility of the supply chain and respond more quickly to customer demand."