LG Energy Solution signs MOU with Compass Minerals

LG Energy Solution signed a memorandum of understanding with Kansas-based Compass Minerals for supplies of lithium carbonate and lithium hydroxide, key raw materials in electric vehicle (EV) batteries.

Kim Dong-soo, right, senior vice president of LG Energy Solution, poses with Chris Yandell, head of lithium at Compass Minerals, after signing an MOU on June 28. [LG ENERGY SOLUTION]

LG Energy Solution signed a memorandum of understanding with Kansas-based Compass Minerals for supplies of lithium carbonate and lithium hydroxide, key raw materials in electric vehicle (EV) batteries.

Under the non-binding deal, Compass Minerals will supply 40 percent of the lithium carbonate and lithium hydroxide it produces every year for seven years starting in 2025.

Lithium carbonate and lithium hydroxide are main raw materials in cathodes. Cathodes are one of four core materials in lithium-ion batteries, which power electric vehicles. Made of lithium, nickel, cobalt and manganese, cathode materials account for 40 percent of the production cost of an EV battery.

Compass Minerals is developing lithium resources with brine produced from its facility on the Great Salt Lake in Utah. It uses a sustainable extraction method using renewable energy such as solar and wind power.

Compass is the first U.S.-based lithium producer to partner with LG Energy Solution, which is trying to firm up its supply chain in North America to meet soaring demand for EVs, the battery maker said.

"Securing key raw materials has become critically important in order to maintain our lead position in the global battery market," Kim Dong-soo, senior vice president at LG Energy Solution's procurement center, said in comments posted on the website of Compass Minerals.

"We believe partnering with Compass Minerals will aid in achieving that goal while solidifying supply chains in the U.S."

BY SARAH CHEA [chea.sarah@joongang.co.kr]