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LG Energy Solution Bets on GT1 to Meet Growing Lithium Demand

Source: GT1

Why it matters: LG Energy Solution will acquire a 7.9% stake in Green Technology Metals (GT1), an Australian company. The deal, expected to secure a steady lithium supply for LG Energy Solution, underscores the growing importance of strategic raw material sourcing in the competitive electric vehicle (EV) battery industry.

Key Points:

  • LG Energy Solution, the South Korean battery manufacturer, will acquire a stake in GT1 in exchange for GT1 supplying 25% of its annual lithium concentrate output for five years. Lithium concentrate, sourced primarily from GT1's Seymour mine in Canada, is essential for producing lithium hydroxide, a key component of batteries.

  • The move is part of LG Energy Solution's strategy to solidify its supply chain in North America as the region emerges as a key strategic market. Myung-Hwan Kim, Chief Production and Purchasing Officer of LG Energy Solution, highlights this move's importance in securing essential minerals.

  • GT1, which operates four lithium mines in Canada, joins LG Energy Solution's growing list of raw material suppliers. Under previous agreements, LG Energy Solution has secured various battery minerals from sources in Australia, Canada, and the United States.

  • While details of the investment remain undisclosed, it's known that LG Energy Solution will subscribe for over 21 million new shares in GT1 for a total investment of approximately A$20 million, giving it a 7.89% stake.

The Big Picture: LG Energy Solution's recent agreement with GT1 indicates a broader trend within the EV battery industry - securing a stable supply of raw materials. This comes at a time when global demand for electric vehicles is rapidly accelerating, making such supply chain strategies increasingly crucial for companies in the EV battery sector.