LG Energy buys four years of Canadian lithium it can steer to storage cells or car batteries

Seoul Economic Daily converted the 240,000 tons into roughly 30,000 tons of lithium hydroxide, enough for batteries in 700,000 high-performance electric vehicles ^[10]. That implies eight tons of concentrate per ton of hydroxide ^[14]. Spread over four years, the deal delivers about 60,000 tons of concentrate a year ^[15], roughly 7,500 tons of hydroxide ^[16] and batteries for 175,000 cars ^[17].

The unit is the puzzle. According to the same report, hydroxide goes into high-nickel ternary batteries, while lithium carbonate goes into LFP and ternary cells ^[11]. LG explained the deal in terms of storage. "This agreement marks another important step in strengthening our raw material supply chain in North America and supporting the region's rapidly growing ESS market," Lee Kang-yeol, head of LG's procurement center, said, according to Yonhap ^[3]. LG plans more than 50 GWh of LFP cell capacity in North America by December, at three wholly owned plants in Michigan and Ontario and at joint ventures with Honda in Ohio and General Motors in Tennessee ^[7]. LFP cells take carbonate ^[11].

The plain reading is that LG is lining up feedstock for those LFP lines and the hydroxide figure was just the newspaper's yardstick. A second reading is that the contract is an option on chemistry. Seoul Economic Daily said it gives LG a supply chain that can adjust output of carbonate and hydroxide as demand for electric vehicles and storage shifts ^[12]. Lee said the company will "improve the stability and flexibility of our supply chain and respond more quickly to customer demand" ^[4]. A third reading, the weakest on this evidence, is that most of the volume ends up as hydroxide for car batteries, with the 700,000-vehicle figure as its only support ^[10].

I think the second reading is closest. Wood Mackenzie's fourfold forecast implies a US storage market starting from roughly 125 GWh ^[18]. That makes storage the growth side, while the car side is in a prolonged downturn ^[8]. A concentrate contract commits LG to tonnage without committing it to a salt. The counter-case is timing: the first deliveries are due late this year ^[1], just as the December LFP capacity is supposed to come online ^[7], and those lines need carbonate. If LG's later disclosures show the Elevra tonnage going overwhelmingly into carbonate for LFP, the deal is a straightforward storage supply contract and this view is wrong.

LG is committing to buy volume, and the spending at the mine stays with Elevra. Lucas Dow, Elevra's chief executive, said the company will push ahead with production expansion on the basis of the LG partnership, according to Seoul Economic Daily ^[13].