LG Energy Solution Ltd (LGES) announced this week it had signed a new agreement with Australia’s Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) to source additional lithium concentrate. The move comes as the South Korean manufacturer looks to secure enough supply of raw materials for its fast-growing global battery business.

This new contract strengthens an existing partnership between the two companies, after they signed an agreement in 2022 for the supply of 50,000 tons of lithium hydroxide between 2026 and 2030.

LGES plans to use the minerals, which are compliant with the US Inflation Reduction Act (IRA), in its fast-expanding network of EV battery plants in North America. The company has battery supply agreements and joint ventures with most major vehicle manufacturers in this region, including with General Motors, Tesla, Stellantis, Toyota, Hyundai-Kia and Honda.

LGES said WesCEF has agreed to supply an additional 85,000 tons of lithium concentrate, which will be used in the production of around 11,000 tons of lithium hydroxide - a crucial raw material for battery cathodes.

WesCEF is expected to produce lithium concentrate and hydroxide at processing plants in Mount Holland in Western Australia, where it is developing one of the world’s largest rock lithium projects - scheduled to become operational in 2025. WesCEF and Chile’s Sociedad Química y Minera (SQM) have so far invested AUD2bn in the mining project, with Covalent Lithium engaged to develop and operate the project.

LGES said it is also exploring strategic opportunities to collaborate with WesCEF in upstream minerals and chemicals processing.

Kang Yeol Lee, Senior Vice President of Procurement Center at LG Energy Solution, said in a statement “By partnering with major suppliers with great potentials like WesCEF, we will ensure stable procurement of key raw materials, thereby delivering advanced battery technologies at competitive prices”.