LG Energy Solution has concluded a binding long-term purchase agreement with Australian Mines for nickel and cobalt. The battery manufacturer thus secures access to 71,000 tonnes of nickel and 7,000 tonnes of cobalt for six years from the end of 2024.
The South Korean manufacturer will purchase the entire production from Australian Mines Limited. According to LG Energy Solution, the company has secured “100 per cent of the rights to battery-grade nickel and cobalt materials from Australian Mines”. The raw materials are to come from the Sconi mine in North Queensland.
LGES says it will use these materials to manufacture batteries for 1.3 million “high performance EVs”. Each of these vehicles is to have a range of over 500 kilometres. LGES does not say how much battery capacity it expects per vehicle.
Delivery is not scheduled until the end of 2024, as the Sconi project is currently still being developed. LGES and Australian Mines are relying on the so-called dry stacking method, which does not require the construction of storage ponds, dams and retention basins for polluted waste water from the mining process. This method is considered more expensive, but also more environmentally friendly.
“Securing key raw materials and a responsible battery supply chain has become a critical element in gaining a greater control within the industry, as the demand for electric vehicles worldwide heightened in recent years,” said Jong-hyun Kim, president and CEO of LG Energy Solution. “LGES will solidify its position as the world’s leading battery manufacturer through a steady supply of raw materials for EV batteries.”
In June, LGES signed a supply agreement for 7,000 tonnes of nickel and 700 tonnes of cobalt per year with Queensland Pacific Metals (QPM). The supply is scheduled to commence in late 2023. In July, it was announced that LGES would also purchase lithium hydroxide mined in the Upper Rhine region from the German-Australian company Vulcan Energy.
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