LG Energy Solution strikes deals for critical battery minerals from three aspiring Canadian suppliers
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Sep 23, 2022
Mehanaz Yakub

The South Korean battery manufacturer — which partnered this year with Stellantis to build an EV battery plant in Windsor — has unveiled agreements to secure future lithium and cobalt output from three Canadian producers starting in 2023

The Three Fires Group, an Indigenous-owned development group based on Kettle and Stony Point First Nation, near Sarnia, Ont., is taking another step towards becoming a significant player in Ontario’s critical minerals and EV battery sector. Photo: Electra Battery Materials Corporation

The South Korean battery manufacturer LG Energy Solution — which partnered this year with Stellantis to build an EV battery plant in Windsor — has unveiled agreements to secure future lithium and cobalt output from three Canadian producers starting in 2023

In a bid to secure its supply chain for the North American electric vehicles market, South Korea-based LG Energy Solution (LGES) has signed agreements to source lithium and cobalt from three Canadian mining companies — Electra Battery Material Corp., Avalon Advanced Materials and Snow Lake Lithium.

LGES is a global manufacturer of lithium-ion batteries for electric vehicles and energy storage systems. The company is already in the process of building a $5-billion EV battery plant in Windsor, Ont. in partnership with Stellantis.

With these new deals, LGES is slated to receive 7,000 tonnes of cobalt sulphate for three years from Electra, starting next year. By 2025, the battery manufacturer will be getting a supply of 55,000 tonnes of battery-grade lithium hydroxide from Avalon for five years and 200,000 tonnes of lithium hydroxide from Snow Lake for a decade.

None of the companies are yet in production, but the deals align with each operation’s projected timelines for commercial availability.

“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,” said Youngsoo Kwon, CEO of LG Energy Solution in a press statement.

“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 EVs and ultimately to a sustainable future.”

Electra’s cobalt refinery

Cobalt sulphate is one of the core minerals used to produce cathodes for EV batteries. Electra owns the only cobalt sulphate refinery in North America, located north of Toronto, in the Temiskaming Shores.

While the refinery is not completed yet, it is anticipated to start operations by 2023. Electra says that at full capacity the plant will be able to provide enough cobalt to meet the needs of up to 1.5 million electric vehicles per year.

As part of the agreement with LGES, Electra will supply 1,000 tonnes of battery-grade cobalt in the first year in 2023 and 3,000 tonnes in each of the following two years. 

Along with the supply arrangement, Electra and LGES have also agreed to work together to look at methods to advance opportunities throughout the North American EV supply chain, including securing sustainable raw material sources.

“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,” said Trent Mell, CEO of Electra in a press note. “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.”

As demand for EV battery materials grows, Electra is looking to open a second cobalt refinery in Quebec between 2025-2026. This refinery is expected to source cobalt from Electra’s Idaho cobalt and copper project.

Lithium supply from Avalon and Snow Lake

Elsewhere in Ontario, Avalon is establishing a lithium battery material processing facility in Thunder Bay.

According to its agreement with LGES, Avalon will it with at least 50 per cent of its planned initial lithium hydroxide production from the Thunder Bay facility for a period of five years, with the option to raise production as demand for EV minerals increases.

By partnering with LGES, Avalon says that it will allow it to be one step closer to realizing its goals of developing a sustainable and secure domestic lithium supply chain in the province.

In Manitoba, meanwhile, where Snow Lake Lithium is currently moving forward with plans to develop what it says will be the world’s first all-electric lithium mine, the company and LGES have signed an agreement to explore opportunities to partner on establishing a lithium hydroxide processing plant in Winnipeg.

The agreement between Snow Lake and LGES is subject to a few requirements, including the completion of due diligence from both parties, but the miners are in process of conducting a study with Montreal-based engineering group, Primero, to determine the best technologies, innovations, and talents necessary to produce a lithium hydroxide facility.

Pre-feasibility assessment work at the mine itself began earlier this year and environmental approvals and other permitting work are still pending.

“Both Snow Lake Lithium and LG Energy Solution recognize the importance of local sourcing of critical raw materials, such as lithium, and that this is the logical step for battery and electric vehicle manufacturers,” says Philip Gross, CEO of Snow Lake Lithium in a press release.

“Our all-electric lithium mine in Snow Lake Manitoba will power five million electric vehicles over the next 10 years, helping to secure the future of the North American automobile market.”

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