LG Energy Solution Buys 80,000 Tonnes of Arkansas Lithium in Ten-Year Deal
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South Korea’s LG Energy Solution signed a ten-year binding agreement with Smackover Lithium to buy 8,000 tonnes of battery-grade lithium carbonate annually starting in 2029.
The contract secures 80,000 tonnes in total from the South West Arkansas Project, representing more than a third of the site’s planned first-phase output of 22,500 tonnes per year. Commercial terms and pricing remain confidential.
Smackover Lithium Direct Extraction Project
Smackover Lithium operates as a joint venture formed in 2024 between Standard Lithium, which holds 55 per cent, and Norwegian energy firm Equinor, which owns 45 per cent. The venture uses direct lithium extraction to pull the metal straight from underground brine rather than relying on evaporation ponds across sites in Arkansas and Texas.
Trading house Trafigura locked in another 8,000 tonnes annually from the same project in March. Together, the Trafigura and LG Energy Solution contracts cover roughly 90 per cent of the venture’s target to pre-sell 80 per cent of its planned capacity.
Three export credit agencies have offered more than $1 billion in prospective debt financing to back the buildout. Project partners expect to reach a final investment decision before the end of the year.
Local Sourcing for North American Cell Plants
For LG Energy Solution, securing Arkansas supply ensures raw materials bypass restrictions tied to foreign entities of concern. Asian battery manufacturers face strict domestic sourcing rules in the United States, driving heavy investment into local processing deals and joint-venture extraction projects.
The Seoul-based manufacturer operates an expanding manufacturing network across North America, targeting more than 50 gigawatt-hours of lithium iron phosphate production capacity by the end of 2026 across five sites. That footprint supplies stationary storage systems, including units for Tesla, alongside electric vehicle programmes.
Production recently started at the company’s Lansing facility in Michigan, which will add nickel-manganese-cobalt cell lines for Toyota electric vehicles alongside its existing storage battery output.
Questions & Answers
Q.When is LG Energy Solution expected to begin receiving the lithium carbonate from Smackover Lithium?
When is LG Energy Solution expected to begin receiving the lithium carbonate from Smackover Lithium?
LG Energy Solution is expected to begin receiving the 8,000 tonnes of battery-grade lithium carbonate annually from Smackover Lithium starting in 2029. This ten-year binding agreement will secure 80,000 tonnes in total.
Q.Which companies formed the joint venture known as Smackover Lithium?
Which companies formed the joint venture known as Smackover Lithium?
Smackover Lithium was formed as a joint venture in 2024 between Standard Lithium, which holds 55 per cent, and the Norwegian energy firm Equinor, which owns 45 per cent of the venture.
Q.What proportion of the South West Arkansas Project's first-phase output will LG Energy Solution's contract cover?
What proportion of the South West Arkansas Project's first-phase output will LG Energy Solution's contract cover?
The LG Energy Solution contract covers 80,000 tonnes in total from the South West Arkansas Project. This represents more than a third of the site’s planned first-phase output of 22,500 tonnes per year.
Q.Why is LG Energy Solution investing in local sourcing of raw materials in North America?
Why is LG Energy Solution investing in local sourcing of raw materials in North America?
LG Energy Solution is investing in local sourcing to ensure raw materials bypass restrictions tied to foreign entities of concern. Strict domestic sourcing rules in the United States drive this strategy for Asian battery manufacturers.