Photo by: Reuters
PERTH (miningweekly.com) – Lithium developer Piedmont Lithium has inked a $75-million investment and offtake agreement with global chemicals company LG Chem.
Under the agreement announced on Friday, LG Chem would subscribe for more than 1.09-million shares in Piedmont, at a price of $68.40 a share, resulting in LG Chem holding a 5.7% interest in the lithium development.
LG Chem has also committed to a 200 000 t offtake agreement over spodumene concentrate produced from Piedmont’s joint venture with Sayona Mining at the North American Lithium (NAL) project, in Québec, over a four-year term.
Piedmont will supply LG Chem with 50 000 t/y of spodumene concentrate for four years with planned shipments beginning in the third quarter of 2023. Pricing will be determined by a formula-based mechanism linked to spodumene market prices at the time of each shipment.
LG Chem will use the material to support its plans to produce cathode materials for key North American customers as well as the intentions of the Inflation Reduction Act of 2022 (IRA).
Furthermore, Piedmont has also agreed to provide LG Chem priority negotiation rights for 10 000 t/y of lithium hydroxide produced by the company at either of its proposed facilities in Tennessee or North Carolina.
“We welcome LG Chem as a shareholder in Piedmont and are excited to partner with them to supply North American lithium that will meet the requirements of the IRA and support the development of the US battery supply chain,” said Piedmont president and CEO Keith Phillips.
“LG Chem is a global leader with a commitment to US electric vehicle (EV) battery manufacturing and plans to build one of the world’s largest cathode plants in Clarksville, Tennessee. We look forward to working with LG Chem as NAL comes online as an important source of lithium in North America.”
The offtake agreement with LG Chem follows a recent amendment to an offtake agreement with EV major Tesla, which will see Piedmont supply 125 000 t of spodumene concentrate from NAL over a three-year period, starting in the second half of 2023 and ending in 2025. The agreement includes an option to renew the offtake agreement for another three years.
Meanwhile, Sayona on Friday reported that the restart of the NAL project was on budget and on track for March this year, with progress towards the concentrator restart and the construction both reaching 96% at the end of January.
The project team is now progressing the next intermediate milestone, the startup of process operations, which comprises the circulation of ore through the entire system, from crushing through sorting, grinding and separation. Commissioning activities are anticipated to be completed this month, with several vendor representatives on site to assist with commissioning and startup activities.