LG Energy Solution has acquired a stake in a company that specializes in smelting in Australia to secure competitive edge in major raw materials for batteries.
LG Energy Solution made an announcement on June 8 that it has signed a contract to acquire 7.5 percent of Queensland Pacific Metal (QPM) Australia's shares by investing about KRW 12 billion won ($10 million) into QPM Australia that produces major raw materials for electric vehicle batteries such as nickel and cobalt.
QPM Australia, founded in 2007, is a smelting company with a 100% stake in the Townsville Energy Chemicals Hub (TECH) project.
The "TECH Project" has been constructing a plant in northern Queensland, Australia, since the second half of 2023 with the goal of producing nickel sulfate and cobalt sulfate for electric vehicle batteries using eco-friendly methods.
LG Energy Solutions will receive a stable supply of 7,000 tons of nickel and 700 tons of cobalt per year for 10 years from the end of 2023 through QPM acquisition and the Offtake Agreement.
Through this, LG Energy Solution is expecting that it will be able to preemptively respond to supply and demand issues of major raw materials for batteries due to growth of electric vehicle battery markets.
LG Energy Solution is planning to gradually increase proportion of its batteries by starting production of nickel, cobalt, manganese, and aluminum (NCMA) batteries for 3rd generation electric vehicles in the second half of this year.
According to market research firm CRU, global demand for nickel is expected to increase from 2.6 million tons in 2021 to 3.1 million tons in 2024.
"As the electric vehicle battery market grows rapidly, securing key raw materials is becoming an important business competitive edge," said LG Energy Solution CPO Kim Myung-hwan. "We will continue to make efforts to establish a solid value chain that extends from raw materials to materials to batteries in the future."
