South Korean electric vehicle (EV) battery manufacturer LG Energy Solution Ltd (LGES) said it had signed a preliminary agreement with Australian mining firm Syrah Resources to supply a key mineral used in lithium ion batteries.

The two companies signed a memorandum of understanding (MoU) for the supply of 2,000 tons of natural graphite anode material per year from 2025 with provision to gradually increase supply over the longer term.

A formal binding agreement is expected to be signed by the end of this year once the finer terms of the deal have been agreed.

Syrah operates a graphite mining operation in Mozambique which is known to have one of the world’s largest graphite reserves.

LGES said Syrah also planned to build a refining plant in Louisiana which would help LGES reduce its dependence on China for its battery minerals requirements. This would also help it meet US requirements for battery components to be sourced or processed locally or in free trade agreement countries under the US government’s new Inflation Reduction Act (IRA).

Last month, LGES signed supply agreements with three Canadian mining and processing companies to source cobalt sulphate and lithium hydroxide, including Electra Battery Materials Corporation, Avalon Advanced Materials and Snow Lake Resources, which followed an earlier deal to source lithium carbonate and lithium hydroxide from US-based Compass Minerals.