Canadian junior Sigma Lithium has signed a binding term sheet for an offtake agreement on a take-or-pay basis for the sale of 6% battery-grade lithium concentrate to LG Energy Solution, one of the world's biggest manufacturers of advanced lithium-ion batteries for electric vehicles (EV).

The six-year offtake for battery-grade sustainable lithium concentrate scales from 60 000 t/y in 2023 to 100 000 t/y from 2024 to 2027, subject to Sigma Lithium and LG executing a mutually acceptable definitive documentation to implement the offtake.

Sigma Lithium and LG also agreed to negotiate each year, starting in 2022, an additional optional supply of battery-grade lithium, not otherwise committed in other Sigma Lithium offtake arrangements.

"With the rapid growth of the EV battery market, securing large volumes of environmentally sustainable and high-quality lithium materials is becoming one of the important sources of competitiveness in our industry," said LG Energy Solution senior VP of procurement Dong Soo Kim.

Sigma is developing hard rock lithium deposits located in its wholly owned Grota do Cirilo project, in Brazil. The company has been producing low carbon high-purity lithium concentrate at an on-site demonstration pilot plant since 2018. This pilot production has been an important part of the commercial strategy of the company, shipping samples of its low carbon, ‘green and sustainable’ high-purity lithium to leading global potential customers, for product certification and testing, with the goal of participating in the rapidly EV supply chain.

Sigma is in pre-construction and detailed engineering of a fully automated, dense media separator production plant, that will apply proprietary algorithms to digitally control the dense media. The production plant will be vertically integrated into the company´s mining operations, exclusively using as feedstock the high purity spodumene ore with exceptional mineralogy from the project.

The production plant will process the spodumene ore into a high purity 6% battery-grade lithium concentrate engineered to the specifications of its customers in the lithium-ion battery supply chain for EVs.