South Korean battery manufacturer LG Energy Solution, a subsidiary of LG Chem, has agreed to become the sole offtaker for the nickel and cobalt produced in Australian Mines’ proposed Sconi Project in Queensland’s north.
Under the agreement, the battery manufacturer will gain access to 71,000 tonnes of nickel and 7,000 tonnes of cobalt – key components of lithium-ion batteries. LG Energy Solution (LGES) says the deal secures enough raw materials to produce 1.3 million high-power electric vehicles (EVs). The six year deal, which has the potential to be extended, begins in 2024.
The agreement is only subject to one condition – which is that Sconi’s owners, Australian Mines, secure financing for the project before the end of June, 2022 – which is presumably highly likely now it has a globally renowned brand taking 100% of its product.
The proposed Sconi Project is to be located near Greenvale, about 250 kilometres west of Townsville in Queensland’s north. The $1.5 billion project claims it will become one of the world’s lowest cost producers of ethically produced cobalt, and has aa “fully auditable” supply chain.
Australian Mines is also a member of the Initiative for Responsible Mining Assurance (IRMA) and has been certified as a carbon neutral organisation since 2020 under the Climate Active program.
LG Energy Solution was keen to highlight these aspects of the mine, also noting in its press release that Sconi will use what’s called a dry stacking method – a more sustainable way of storing ‘tailings’, the mining term for the waste materials left after the target mineral (in this case cobalt and nickel) has been extracted. Dry stacking aims to decrease the risk of groundwater contamination associated with mining as well as using less storage space.
LGES, in its statement, said it hopes the deal will “enhance its competitiveness in ESG [Environmental, Social and Governance] management.”
“Securing key raw materials and a responsible battery supply chain has become a critical element in gaining a greater control within the industry, as the demand for electric vehicles worldwide heightened in recent years,” LG Energy Solution’s president and CEO, Jong-hyun Kim, said.
“LGES will solidify its position as the world’s leading battery manufacturer through a steady supply of raw materials for EV batteries,” he added.
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