LG Energy Solution announced on the 8th that it has signed a long-term supply agreement for lithium concentrate with Elevra Lithium, a North American lithium producer. By securing a long-term supply of lithium concentrate, the starting point of the battery supply chain, the company has strengthened its North American supply chain from raw material procurement through materials processing to battery production.

Under this agreement, LG Energy Solution will receive a total of 240,000 tons of lithium concentrate over four years starting at the end of this year. This is equivalent to about 30,000 tons in lithium hydroxide terms, enough to produce batteries for approximately 700,000 high-performance electric vehicles.

The lithium concentrate will be produced at the North American Lithium (NAL) mine operated by Elevra Lithium in Quebec, Canada.

● Securing the first step of the battery supply chain… Flexible response to changes in material demand

The core of this agreement is that LG Energy Solution has secured raw materials for battery production from the pre-refining stage.

Batteries are produced through a process that begins with mining lithium concentrate, refining it into lithium carbonate or lithium hydroxide, and then processing it into battery materials such as cathode materials. Through this agreement, LG Energy Solution has secured the very first stage of the supply chain—raw materials—in North America itself, connecting to materials and battery production.

Lithium concentrate is a raw material obtained by processing and concentrating lithium ore. Lithium carbonate produced through refining is used mainly in lithium iron phosphate (LFP) batteries and ternary batteries, while lithium hydroxide is primarily used in high-performance high-nickel ternary batteries.

In particular, electric vehicles (EVs) and energy storage systems (ESS) require different lithium materials depending on the battery type. By securing raw materials instead of only receiving refined materials, LG Energy Solution expects to respond more flexibly to shifting market demand for lithium carbonate and lithium hydroxide.

The fact that the company can procure raw materials locally in North America on a long-term basis is also significant. This enables it to respond to volatility in global raw material markets and supply chain uncertainty, while expanding linkages with its North American battery production facilities.

● Five North American ESS production hubs… LFP capacity to exceed 50 GWh by year-end

LG Energy Solution plans to link the lithium raw materials secured under this agreement with its North American battery production hubs.

In North America, ESS demand is rising due to the expansion of artificial intelligence (AI) data centers and the increased adoption of renewable energy. In response, LG Energy Solution is enhancing its ESS battery supply capabilities, centering on local production facilities.

LG Energy Solution currently operates three wholly owned production facilities in North America: the Lansing and Holland plants in Michigan, USA, and the NextStar Energy plant in Ontario, Canada. Including the L-H Battery Company plant in Ohio, a joint venture with Honda, and the Ultium Cells plant in Tennessee, a joint venture with General Motors (GM), the company has a total of five ESS battery production hubs in North America. It plans to expand its North American ESS LFP battery production capacity to more than 50 GWh by the end of this year.

Through Vertech, its North American ESS system integration (SI) subsidiary, LG Energy Solution is also conducting an ESS business that covers everything from battery cell supply to system integration.

In particular, NextStar Energy in Windsor, Canada, is the country’s first large-scale battery plant and began mass production of ESS batteries in November last year. LG Energy Solution plans to link the lithium raw materials secured in Canada with its production facilities in the United States and Canada to strengthen its intra-North American supply chain.

Lucas Dow, Chief Executive Officer (CEO) of Elevra Lithium, said, “This agreement is an important milestone in advancing our growth strategy,” adding, “Based on our collaboration with LG Energy Solution, we will strengthen our business competitiveness and drive production expansion.”

Lee Kang-yeol, Senior Vice President and Head of the Purchasing Center at LG Energy Solution, said, “This agreement is an important achievement in reinforcing the North American raw material supply chain and responding to the rapidly growing North American battery market,” and added, “Based on a stable supply of lithium concentrate, we will enhance the stability and flexibility of our supply chain and respond more swiftly to customer demand.”

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