Piedmont to Supply LG Chem with Raw Material for EV Batteries

Researched by Industrial Info Resources (Sugar Land, Texas)--Piedmont Lithium (NASDAQ:PLL) (Bessemer City, North Carolina) has signed a binding four-year offtake agreement with LG Chem Limited (Seoul, South Korea) to supply 50,000 metric tons per year of spodumene concentrate from Piedmont's jointly-owned North American Lithium operation in Canada. LG Chem plans to use the lithium-ore raw material to support electric vehicle (EV)-battery production.

In a press release announcing the agreement, Piedmont said it expects commercial shipments to begin in the third quarter of 2023, from its North American Lithium joint venture with Sayona Mining Limited (Milton, Queensland)--in which Piedmont and Sayona are expanding and restarting a lithium mine and mill in La Corne, Quebec. Piedmont expects spodumene concentrate production to restart in the first half of the year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a detailed project report.

The deal also includes an agreement under which LG Chem will make a $75 million equity investment to hold 5.7% of Piedmont common shares.

In the press release, Keith Phillips, president and chief executive officer of Piedmont, 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 U.S. battery supply chain."

Piedmont said LG Chem plans to use the spodumene concentrate to produce cathode materials, which are a major component of EV batteries.

"This agreement allows LG Chem to provide differentiated values to North American customers with products that satisfy IRA [Inflation Reduction Act] standards by preemptively securing raw materials in the U.S., our key market," said Hak-Cheol Shin, vice chairman and chief executive officer of LG Chem. "As we work to build various partnerships, including joint metal investments with automotive OEMs (original equipment manufacturers) and battery makers, we're pleased that our partnership with and commitment of funds to Piedmont will help support its development of U.S. lithium projects."

A subsidiary of LG Chem, LG Energy Solution Limited (LGES), and Honda Motor Company (NYSE:HMC) (Tokyo, Japan) are investing $4.4 billion to build the Marysville Automotive Lithium-Ion Batteries plant in Ohio, which will supply batteries to Honda facilities in North America and power EVs from both Honda and Acura. Construction is slated to begin this year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for the related project report.

Industrial Info is tracking 27 projects in the U.S., worth $3.3 billion, that involve the extraction, processing and recycling of lithium for batteries. Click here for a full list.

In a January 15 webinar on global project activity in the Metals & Minerals Industry, Industrial Info's vice president of research for the industry, Joe Govreau, and Shaheen Chohan, vice president of Global Analytics, noted environmental, social and governance (ESG)-related projects, including those to support the demand for metals for EVs, are helping to drive activity in the industry. For more information, see Industrial Info's February 16, 2023, article - IIR Webinar: Global Metals & Minerals Projects on the Rise.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).