Piedmont Lithium signs US$75m equity, offtake deal with Korean chemical giant LG Chem
LG Chem has agreed to offtake 200,000t of spodumene concentrate from Piedmont over four years.
Piedmont Lithium (ASX: PLL) has added South Korea’s LG Chem to its partnership list, adding US$75 million (A$109.6 million) to its equity base and a large spodumene deal to its order book.
The Korean company has committed to buying 200,000 tonnes of spodumene concentrate over a four-year period.
The concentrate will come from Piedmont’s jointly-owned North American Lithium.
That joint venture between Piedmont and Sayona Mining (ASX: SYA) allows Piedmont to buy 50% of production from Sayona’s Quebec lithium mining operation.
LG Chem, under the equity investment agreement, will now own 1.09 million Piedmont common stock listed on Nasdaq, paying about US$68.40 per share (A$99.96 per share). This will give the Seoul-based company a 5.7% stake in Piedmont.
Deal also covers lithium hydroxide
Beginning in the third quarter this year, Piedmont will ship 50,000t per annum of spodumene concentrate to its new customer.
LG Chem plans to use this feedstock to produce cathode materials for its key North American customers.
Piedmont has also agreed to provide LG Chem with priority negotiation rights for 10,000tpa of lithium hydroxide it will be producing from either of its proposed plants in Tennessee and North Carolina.
Piedmont describes LG Chem as a global leader with a commitment to electric vehicle battery manufacturing in the US.
Will meet US requirements
LG Chem plans to build one of the largest cathode plants in world, to be located at Clarksville, Tennessee.
LG Chem vice chairman and chief executive officer Hak-Choel Shin said this agreement will allow his company to provide differentiated values to North American customers that satisfy the requirements of the recently passed Inflation Reduction Act.
It will also allow LG Chem to support the development of the US battery supply chain.
“We’re pleased that our partnership with, and commitment of funds to, Piedmont will help support the development of US lithium projects,” he added.
Meanwhile, Piedmont plans to use the new equity funds to progress its own lithium hydroxide plant and the joint-venture Ewoyaa lithium project in Ghana.