Anson Resources Inks Lithium Supply Deal with LG Energy Solution
Anson Resources Inks Lithium Supply Deal with LG Energy Solution

Anson Resources Inks Lithium Supply Deal with LG Energy Solution

  • 01-May-2024 5:06 PM
  • Journalist: Bob Duffler

Anson Resources Limited (ASX: ASN), also known as "the Company," is delighted to announce the successful completion of negotiations with LG Energy Solutions, culminating in the execution of its inaugural Offtake Term Sheet. This agreement entails the supply of battery-grade Lithium Carbonate sourced from the Company's wholly-owned Project situated within the Paradox Basin in Southern Utah.

The Offtake Term Sheet outlines the supply arrangement for a maximum of 4,000 dry metric tonnes per annum (tpa) of battery-grade Lithium Carbonate generated at the Project, anticipated to commence operations in 2027. This quantity constitutes approximately 40% of the Project's initial production capacity, estimated at around 10,000tpa.

LG Energy Solution emerges as an excellent collaborator for Anson Resources due to its broad customer network, including tier one OEMs, and substantial investments in expanding production across North America. Currently, LG Energy Solution operates or is constructing eight facilities in North America, including standalone sites in Michigan and Arizona, along with six joint venture facilities with prominent automakers.

The execution of the Offtake Term Sheet with LG Energy Solution signifies another significant achievement in the Company's advancement within the Paradox Basin. This follows the near-completion of all permitting procedures and the successful operation of the Company's Sample Demonstration Plant (SDP). The Offtake Term Sheet, or any subsequent definitive agreement, will come into effect pending Anson Resources' final investment decision, the initiation of commercial production in the Paradox Basin, and the qualification of the product for offtake by LG Energy Solution.

Furthermore, Anson is advancing discussions with other potential tier one global clients, aiming to enhance its offtake strategy, which entails securing 80-90% of initial production through long-term agreements.

The Paradox Basin represents a lithium asset of global significance. Through its wholly-owned USA subsidiary, A1 Lithium, the Company is dedicated to transforming the Paradox Basin into one of the United States' largest lithium resources. Extensive exploration and testing of the brine, known to be present in various areas within the Paradox formation, are currently underway. The ongoing efforts aim to validate the Company's hypothesis that the brines within the Paradox Basin harbor one of North America's largest lithium resources.

According to the Definitive Feasibility Study disclosed on September 8, 2022, the Paradox Lithium Project of the Company is projected to generate approximately 10,000 tonnes per annum (tpa) of battery-grade Lithium Carbonate in its initial phase. Additionally, the Project boasts leading-edge ESG (Environmental, Social, and Governance) credentials. The unique characteristic of the brine being naturally pressurized, eliminating the necessity for pumping, underscores its environmentally friendly nature. Moreover, the Company employs cutting-edge lithium extraction technology that utilizes only 1% of the water compared to traditional hard rock extraction methods.

Bruce Richardson, Executive Chairman and Managing Director of Anson Resources, remarked, "Anson acknowledges the undeniable shift occurring in the US supply chain for electric vehicle battery materials and recognizes the significant role played by Korean and Japanese battery manufacturers. Initiatives such as the Inflation Reduction Act and other US policy measures have spurred considerable investment in new battery manufacturing facilities across North America, aimed at meeting the escalating demand for electric vehicles in the US. This surge in manufacturing investment has resulted in a heightened demand for domestically produced lithium in the US, not only to shorten supply chains geographically but also to increase the US content of electric vehicle batteries and vehicles to comply with IRA incentive requirements. Anson identified this transformation and strategically directed its offtake marketing efforts towards companies that have invested in North America, particularly in the US, where Anson's developmental work in the Paradox Basin, Southern Utah, is strategically positioned. We are pleased to have reached an agreement with LG Energy Solution, enabling us to execute our first binding Offtake Term Sheet for a minimum of 40% of our production. This lays the groundwork for a long-term partnership, and we take pride in supplying US-manufactured lithium from the Paradox Basin to LG Energy Solution, a reputable global leader in the lithium battery value chain, as they expand the largest battery manufacturing capacity in the US."

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