LG Energy Solutions (LGES), a leading global manufacturer of lithium-ion batteries for electric vehicles has signed a non-binding Memorandum of Understanding (MoU) with Avalon Advanced Materials (Avalon) for lithium hydroxide and Electra Battery Materials Corporation (Electra) to supply battery-grade cobalt. Both Avalon and Electra are based out of Canada.
Avalon plans to establish a regional lithium battery materials supply chain in Ontario to serve the needs of future electric vehicle and lithium-ion battery manufacturers in southern Ontario and elsewhere. Avalon would commit, for five years initially, to provide LGES with at least 50% of its planned initial lithium hydroxide production from its Thunder Bay, Ontario facility, with the potential to increase production as demand grows.
Youngsoo Kwon, CEO of LG Energy Solution said, “As we have recently announced our mid-to long-term strategy to focus on North America, the fastest growing EV market, this partnership serves as a crucial step towards securing a stable key raw material supply chain in the region.
“By constantly investing in upstream suppliers and establishing strategic partnerships with major suppliers of critical minerals, LGES will continue to ensure the steady delivery of our top-quality products, thereby further advancing the global transition to EV’s and ultimately to a sustainable future,” added Kwon.
Don Bubar, President, Avalon said, “We are delighted to enter into this agreement with LGES to support our aspirations of establishing the mid-stream processing capacity in Thunder Bay to take advantage of the many lithium resources that occur in north-western Ontario to create the supply chain for the emerging lithium-ion battery manufacturing capacity in southern Ontario. “
On the other hand, Electra will supply LGES with 7,000 tonnes of battery grade cobalt from 2023 to 2025. The material will be supplied from what is said to be the only cobalt sulfate refinery in North America, located north of Toronto, Ontario.
Electra will supply 1,000 tonnes of cobalt contained in a cobalt sulfate product in 2023 and a further 3,000 tonnes in each of 2024 and 2025 under an agreed pricing mechanism. In addition to the supply agreement, Electra and LG Energy Solution have agreed to cooperate and explore ways to advance opportunities across North America’s EV supply chain, including, but not limited to, securing of sustainable sources of raw materials.
Trent Mell, CEO, Electra said, “LG Energy Solution is a global leader in the electric vehicle supply chain, and we are delighted to sign our first strategic supply agreement with such an important player in the lithium-ion battery market. This is only the beginning of a larger strategic relationship with LG Energy Solution involving our other assets and growth initiatives in the North American battery supply chain.”
Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade said, “A key part of our government’s plan to build Ontario is supporting partnerships like this one between Electra and LG Energy Solution. With our critical minerals strategy, cutting-edge technology and world-class workforce, Ontario has what it takes to build the cars of the future, and we’re proud to see more and more companies come to Ontario for exciting partnerships.”