LGES & Yahua want to process lithium in Morocco
The South Korean battery manufacturer LG Energy Solution has signed a letter of intent with the Chinese Yahua Industrial Group to produce lithium hydroxide in Morocco. The location was a strategic choice.
Details on the schedule and volume of the planned lithium hydroxide production by LGES and Yahua in Morocco are unknown. However, Korean media reference LGES representatives saying the company wanted to further strengthen its supply chain for lithium hydroxide with the letter of intent.
But why Morocco? The North African country has free trade agreements with the USA and the EU. A few days ago, the US government published the rules that EVs have to fulfil to qualify for the tax incentives of up to 7,500 US dollars under the Inflation Reduction Act (IRA), including the rules for the origin of battery raw materials. The IRA stipulates that only EVs that use a certain percentage of critical minerals from the US or a country with a free trade agreement with the USA can be subsidized. The EU is planning similar requirements for the origin of key materials with the Critical Raw Materials Act, and Morocco would qualify for funding in both markets.
Lithium hydroxide is one of the lithium compounds used in batteries; an alternative would be lithium carbonate. However, lithium hydroxide is easily synthesized with nickel, a key raw material for high-nickel, high-capacity EV batteries.
- ADVERTISEMENT -
In recent years, LGES has concluded numerous binding orders for lithium and several MoUs. In Germany, for example, the company wants to purchase lithium from Vulcan Energy from the Upper Rhine Gra. Still, the South Koreans have alagreedent with Sigma Lithium from Canada, which extracts its lithium in Brazil. In addition, there are offtake agreements with SQM from Chile, Liontown Resources from Australia and Compass Minerals from the USA.
Yahua specialises in the processing of lithium hydroxide. KED Global portal quotes an LGES representative: “Through the synergy of a stable raw material supply chain and Yahua’s excellent manufacturing technology, high-quality lithium hydroxide can be secured.”
- ADVERTISEMENT -