LG Energy Solution has begun to replace natural graphite produced in China. LG Energy Solution will receive natural graphite produced in the US by an Australian company. This was a response to the newly enforced US Inflation Reduction Act (IRA), including the exclusion of key materials for secondary batteries in China, such as graphite.
On the 19th (local time), LG Energy Solution exchanged an MOU with an Australian graphite company, Syrah, to supply natural graphite. The two companies will receive 2,000 tons of natural graphite produced at Syrah's Louisiana plant in the US from 2025. They plan to increase the scale of cooperation. Natural graphite is a raw material for anode materials, which is a core material for EV batteries, and a key mineral that depended highly on China. The proportion of imports of natural graphite from China during January to June exceeded 80% according to the Korea International Trade Association. The import value of natural graphite from China is estimated at $64.45 million (89.6%).
LG Energy Solution has enhanced its natural graphite supply chain in preparation for the implementation of the US IRA. Syrah operates a mine in Mozambique, Africa, which is the world's largest graphite deposit. Syrah plans to set up a natural graphite production plant in Louisiana, USA. The graphite will be included in the subsidy for EVs, if Syrah uses graphite produced at a local production plant in the US as a raw material for anode materials.
LG Energy Solution is diversifying the supply and demand of EV battery materials. It will receive a total of 7,000 tons of cobalt sulfate and 255,000 tons of lithium hydroxide from Canadian mineral companies Electra, Avalon, and Snow Lake. It also secured 690,000 tons of Canada’s Sigma lithium concentrate and US lithium company Compass Mineral’s lithium hydroxide, 45,000 tons of lithium hydroxide from Germany's Vulcan Energy, and 700,000 tons of lithium concentrate from Australia’s Liontown.
Vice chairman of LG Energy Solution, Young-soo Kwon said, “It is significant that we could preemptively secure competitive raw materials in the US. We will provide best quality, cost and delivery dates to our customers by securing battery raw material supply stability and cost competitiveness.” CEO of Syrah. Sean Verner, said, "We will continue our efforts to expand US battery production capacity, and cooperatively build a supply chain with LG Energy Solution."
By Staff Reporter Ji-woong Kim (jw0316@etnews.com)