LG Energy Solution nabs Aussie artificial graphite deal

LG Energy Solution signed a graphite development deal with Australian battery material supplier Novonix, in a move to diversify its sources away from China under the U.S. Inflation Reduction Act (IRA).

LG Energy Solution's battery manufacturing plant in Poland [LG ENERGY SOLUTION]

LG Energy Solution signed a graphite development deal with Australian battery material supplier Novonix, in a move to diversify its sources away from China under the U.S. Inflation Reduction Act (IRA).

Under the deal, the duo will jointly develop artificial graphite, with LG Energy Solution purchasing the Brisbane, Australia-based company’s convertible bonds worth $30 million.

The joint development project aims to deliver over 50,000 tons of artificial graphite over a 10-year period. Novonix will supply its graphite exclusively to LG Energy Solution at competitive prices, according to the latter.

Artificial graphite, a core material in manufacturing battery anodes, is known to elongate batteries' lifespan and reduce the charging time compared to natural graphite. It accounted for more than 83 percent of the total anodes market as of 2022, according to data from the Korea Trade-Investment Promotion Agency.

Founded in 2012, Novonix manufactures anode materials for batteries. The company has an artificial graphite production plant in Tennessee, making it eligible for U.S. government incentives via the IRA subsidy program.

“Through our collaboration with Novonix, which has production capacity in the United States, we are now able to meet the soaring demand by securing a stable supply of anodes, which is a core component of a battery,” said Kim Dong-su, senior vice president at LG Energy Solution.

With the IRA restricting the use of Chinese-made materials, local battery makers are scrambling to find alternative sources.

Korea is highly dependent on China in procuring battery materials. China accounted for 91.1 percent of Korea’s total artificial graphite imports last year, according to Korea International Trade Association.

In May, SK On also signed an agreement with Colorado-based Westwater Resources to co-develop anode materials. Under the three-year agreement, the two companies will work together to develop high-performance anode materials using Westwater's graphite.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]