LG Energy Solution is stepping up efforts to localize its battery materials supply chain in North America by securing a long-term supply of lithium carbonate produced in the United States.
The battery maker said Sept. 1 that it had signed a long-term agreement with Smackover Lithium, a U.S.-based lithium development company, to purchase lithium carbonate produced at the company’s planned project in Arkansas.
Under the agreement, LG Energy Solution will receive a total of 80,000 tons of lithium carbonate over 10 years beginning in 2029, when Smackover Lithium is scheduled to start commercial production. Annual deliveries will amount to about 8,000 tons.
Smackover Lithium is a joint venture established by Standard Lithium, a U.S. lithium development company, and Equinor, Norway’s state-owned energy company. The company is developing the South West Arkansas Project, where it plans to use direct lithium extraction, or DLE, technology to produce lithium carbonate.
The agreement is expected to help LG Energy Solution reduce its reliance on overseas sources of critical battery materials while strengthening its presence across the North American supply chain.
Lithium carbonate is a key raw material used in both lithium iron phosphate (LFP) and nickel-based ternary batteries. Demand for the material has gained attention as the North American energy storage system market expands and battery makers increase their focus on LFP batteries.
The Arkansas project’s use of DLE technology is another factor drawing attention. The extraction method is designed to recover lithium directly from underground brine and can reduce the environmental footprint associated with conventional lithium production methods.
Securing U.S.-produced lithium could also improve LG Energy Solution’s ability to respond to requirements under the U.S. Inflation Reduction Act. The company expects the agreement to contribute to both supply chain stability and its environmental, social and governance competitiveness.
LG Energy Solution currently operates or is building eight production facilities across North America. With the latest agreement, the company aims to establish a more integrated regional supply chain spanning raw material procurement and battery manufacturing.
The company has also been diversifying its lithium sourcing network outside China. It previously signed a long-term agreement with Chilean lithium producer SQM covering 100,000 tons of lithium hydroxide and lithium carbonate. Partnerships with lithium companies in Australia, Canada and Chile are also part of its broader sourcing strategy.
LG Energy Solution has maintained its long-term supply relationship with Australia’s Liontown despite selling its equity stake in the company earlier this year. In February, LG Energy Solution converted Liontown’s convertible bonds into shares and subsequently sold its entire stake, generating an investment return of about 80 billion won. Its 15-year agreement to receive 1.75 million tons of lithium concentrate from Liontown remains in place.
David Park, CEO of Standard Lithium, said the partnership with LG Energy Solution would provide a foundation for long-term and sustainable supply of U.S.-produced lithium carbonate.
Lee Kang-yeol, executive vice president and head of LG Energy Solution’s Procurement Center, said the agreement would strengthen the company’s access to environmentally produced critical minerals in North America and enhance supply chain stability.
LG Energy Solution plans to continue expanding its regional sourcing network as it seeks to build a more competitive and resilient battery value chain in the North American market.
