LG Energy signs long-term battery materials deal with Australian Mines

South Korea’s LG Energy Solution Ltd. said on Monday it has signed a long-term contract to receive key battery materials from Australian Mines Ltd.

Under the deal, LG Energy, the battery unit of LG Chem Ltd., will receive 71,000 tons of nickel and 7,000 tons of cobalt from the Australian company over six years from the second half of 2024.

The secured materials will be enough to manufacture batteries that can power 1.3 million high-performance electric vehicles, according to LG Energy.

“Stable procurement of key materials is crucial to maintaining our leadership in the growing electric vehicle battery market,” LG said in a statement.

The deal comes as the race among major global battery makers to procure raw materials is getting fierce amid increasing global demand for EVs.

SK Innovation Co., a unit of Korea’s SK Group, recently signed a deal to buy 30,000 tons of cobalt from Glencore Plc. until 2025.

Prices of core raw materials such as lithium and cobalt for electric vehicle batteries have soared to threaten the global auto industry’s key future growth engine.

Raw materials, including lithium and cobalt, usually account for 30-45% of battery costs, while batteries make up 30-40% of EV prices.

Write to Il-Gue Kim at Black0419@hankyung.com
In-Soo Nam edited this article.