The new deal between Electra Battery Materials and LG Energy Solution entails the supply of 19,000 tons of battery-grade cobalt from 2025 to 2029. The cobalt will be sourced from North America’s sole cobalt sulfate refinery in Toronto, Ontario. The contract begins with 3,000 tons of cobalt, refined from cobalt sulfate products, to be delivered in 2025, followed by 4,000 tons annually through 2029.
This collaboration comes as an extension of their previous partnership, wherein they signed a three-year deal in September of the previous year for the supply of 7,000 tons of refined cobalt, set to commence this year.
By securing this extended cobalt supply contract, LG Energy Solution aims to bolster its EV battery supply chain in North America, a crucial approach in compliance with the US’ Inflation Reduction Act (IRA) regulations on EVs.
The latest agreement is poised to substantially reduce LG Energy Solution’s reliance on China for EV battery materials, and it also marks a joint effort by both companies to fortify the EV supply chain in North America.
According to CRU, a leading global metals, mining and fertiliser industry tracker, China currently commands 71% of global refined cobalt supply, 76% of refined nickel and 93% of refined manganese supply.
In response to the IRA regulations, LG Energy Solution is proactively expanding its battery material supplier base by forming partnerships with diverse mining and refining companies worldwide.