Australian mining company Anson Resources has announced a lithium carbonate supply agreement with South Korean battery giant LG Energy Solution. Under the deal, Anson Resources will supply 4,000 dry metric tons of lithium carbonate per year from its Paradox Basin project in Utah to LG Energy for an initial term of 5 years.
The Paradox Lithium project, owned by Anson Resources’ subsidiary A1 Lithium, has a production capacity of around 10,000 tons per annum of battery-grade Lithium Carbonate under phase 1. The project is powered through hydro and solar energy, and the supplied lithium will be U.S.-made.
The lithium market has gained significant traction in recent years due to the global trend of transitioning to green energy and the widespread adoption of electric vehicles. However, the prices for lithium, a key ingredient in EV batteries, have fallen quite a lot in the last few months, partly due to diminishing demand from China, one of the world’s largest EV markets.
Last month, another major Australian lithium producer, Mineral Resources, decided to hold onto its lithium production expansion plans citing lower lithium prices. This supply deal with LG Energy Solution, a supplier to Tesla and General Motors, among others, provides some stability for Anson Resources amid the current market conditions.
LG Energy Solution has recently flagged concerns over a sluggish EV demand and plans to cut its capital expenditure for this year. The long-term supply agreement with Anson Resources could help the South Korean battery maker secure a steady supply of lithium as it navigates the shifting landscape in the electric vehicle and battery industries.