LG Energy Solution has announced its plan to secure core materials in Morocco, Africa to further strengthen its battery supply chain.
On April 5, the company signed a memorandum of understanding (MOU) with Yahua, a leading Chinese lithium compound manufacturer, for the production of lithium hydroxide in Morocco, Africa.
Morocco, a country located at the northern tip of the African continent, has signed free trade agreements with both the United States and the European Union. Through this partnership with Yahua, LG Energy Solutions aims to strengthen its supply chain of lithium hydroxide, which is a key material for cathode materials used in high-nickel high-capacity electric vehicle batteries.
Lithium hydroxide is a critical raw material that is essential for synthesizing nickel, which is used as a key raw material for cathode materials in high-performance electric vehicle batteries.
As the proportion of nickel increases, the energy density of the battery increases, resulting in longer mileage per charge. Therefore, it is crucial for the battery industry to establish a stable lithium hydroxide supply chain.
Yahua is a leading Chinese lithium hydroxide manufacturer that has been verified for its product quality by major battery manufacturers worldwide. LG Energy Solution expects to secure high-quality lithium hydroxide by collaborating with Yahua and leveraging its excellent manufacturing quality technology based on the existing stable raw material supply chain.
This partnership with Yahua is also expected to help LG Energy Solution respond more flexibly to the rapidly changing external business environment, such as the US Inflation Reduction Act (IRA) and the EU Core Raw Material Act (CRMA).
Overall, this move is likely to strengthen LG Energy Solution's battery supply chain and help it meet the growing demand for high-performance electric vehicle batteries.
“Based on this cooperation, we will be able to further strengthen the raw material supply chain in the North American and EU markets, where high growth is expected in the future," said Kim Dong-soo, head of LG Energy Solution Purchasing Center. "We will continue to increase customer value by securing differentiated raw material supply stability and quality competitiveness.”
Meanwhile, LG Energy Solution is making continuous efforts to strengthen its core raw material supply chain.
