On April 5th, LG Energy Solution announced that it has signed a memorandum of understanding with Yahua Group to jointly build a lithium hydroxide plant in Morocco. The partnership aims to strengthen the battery supply chain and ensure the supply of core materials. The plant will produce lithium hydroxide, a key material in battery production.
According to LG Energy Solution, the free trade agreements signed between Morocco, the United States, and the European Union mean that lithium hydroxide produced in Morocco will not be subject to trade discrimination under US and EU battery laws. The agreement will further strengthen the supply chain of core materials, including lithium hydroxide for positive electrodes, and allow for more flexible response to external operating environments, such as the US Inflation Reduction Act (IRA) and the EU Critical Raw Materials Act (CRMA).
It is evident that political factors will become increasingly important reference criteria for battery supply chain companies in their investment layout.
In February, Yahua Group’s subsidiary, YALY, signed a procurement agreement with LG Energy Solution’s parent company, LG Chem, to purchase battery-grade single-hydroxide lithium for a total of approximately 30,000 tons over a period of four years, from 2023 to 2026.
In addition to this cooperation, LG Energy Solution has signed a 5-year 45,000-ton lithium hydroxide supply contract with German lithium producer Vaken Energy, a 5-year 700,000-ton lithium hydroxide raw material lithium concentrate contract with Australian Langtai, and a 9-year 55,000-ton lithium hydroxide and carbonate contract with Chilean SQM.
It can be seen that LG Energy Solution is accelerating the construction of a stable supply chain of core raw materials to support its battery production capacity target plan.
Currently, LG Energy Solution has established or planned to establish battery factories in South Korea, the United States, China, Poland, Indonesia, Canada, Turkey, and other countries, with the goal of expanding global production capacity to 300 GWh by the end of 2023.
