Tesla Inc (NASDAQ: TSLA) supplier LG Energy Solution (LGES) said in a statement on Friday it has signed separate partnership agreements with three major critical mineral suppliers in Canada to secure lithium and cobalt.
The lithium-ion battery manufacturer said the latest arrangements to secure minerals from Snow Lake Resources Ltd. (NASDAQ: LITM), Electra Battery Materials Corporation (NASDAQ: ELBM) and Avalon Advanced Materials Inc. (OTC: AVLNF) are in line with the company's strategic vision to reinforce its key battery materials supply chain in North America.
Electra, known to be the only supplier capable of refining cobalt sulfate in North America, will supply LGES with 7,000 tons of cobalt sulfate for three years starting in 2023.
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Avalon will supply LGES with lithium hydroxide (11,000 tons per year) for five years initially, starting in 2025. LGES will also be provided with Snow Lake's lithium hydroxide (20,000 tons per year) for ten years once production starts in 2025.
Why It Matters: The recently-passed Inflation Reduction Act (IRA), which stresses the importance of EV battery components manufactured or assembled in North America, has further underscored the significance of battery manufacturers establishing a local supply chain within North America.
In North America this year, LGES signed a non-binding MoU with Compass Minerals International, Inc. (NYSE: CMP) on lithium carbonate and lithium hydroxide. The company also signed a binding term sheet with Canada's Sigma Lithium (NASDAQ: SGML) for the supply of battery-grade lithium.