LG Energy Solution Secures 10-Year Lithium Carbonate Supply Deal

LG Energy Solution has strengthened its domestic battery raw-material supply chain by signing a 10-year binding offtake agreement with Smackover Lithium for battery-grade lithium carbonate produced in the United States.

Under the agreement, Smackover Lithium will supply LG Energy Solution with 8,000 metric tonnes of lithium carbonate each year for a decade. Smackover Lithium is a partnership between Standard Lithium Ltd. and Equinor, an international energy company. The long-term arrangement is designed to provide LG Energy Solution with a reliable source of locally produced lithium, a critical raw material for lithium-ion battery manufacturing.

The agreement comes as rising electricity demand accelerates the development of energy storage systems (ESS) across North America. Battery manufacturers are increasingly seeking secure and geographically diversified sources of cathode materials, particularly for lithium iron phosphate (LFP) batteries used in stationary energy storage applications.

The lithium carbonate supplied under the agreement will come from Smackover Lithium’s South West Arkansas (SWA) Project in Arkansas. The U.S.-based supply is expected to support LG Energy Solution’s efforts to meet requirements related to non-prohibited foreign entities (non-PFE) and strengthen its ability to serve strategic North American markets.

LG Energy Solution already operates seven manufacturing facilities in the United States, including three standalone production sites. Several of these facilities have established capabilities for producing LFP batteries. By combining its existing U.S. manufacturing infrastructure with domestically sourced lithium carbonate, the company is moving toward a more integrated local supply chain covering raw-material sourcing through battery production.

Smackover Lithium plans to produce the lithium carbonate through direct lithium extraction (DLE) and purification technologies. DLE can selectively recover lithium from brine resources and is increasingly being evaluated as an alternative to conventional extraction methods because of its potential for lower land and water requirements.

Standard Lithium CEO David Park said the agreement is expected to establish the foundation for a long-term relationship with LG Energy Solution and provide sustainably produced, U.S.-based battery-grade lithium carbonate.

LG Energy Solution Procurement Center Leader Kang Yeol Lee said the partnership will contribute to a more resilient supply chain while supporting competitive and sustainable battery products for the energy storage and electric vehicle markets.

The agreement also reflects LG Energy Solution’s broader strategy of securing critical battery materials through long-term partnerships and diversifying sourcing by region. With regulatory requirements and supply-chain risks becoming increasingly important in the battery industry, domestic lithium procurement could help the company improve supply security, cost competitiveness, and market access in North America.

Product and Chemical Commodity Price Impact

The agreement is positive for lithium carbonate demand and supply-chain security, particularly in the U.S. battery and ESS markets. LG Energy Solution’s commitment to 8,000 tonnes annually for 10 years provides Smackover Lithium with a stable long-term customer and could support development of the SWA Project. In the near term, the deal is unlikely to cause a sharp global price increase because the contracted volume is relatively small compared with global lithium supply. However, greater U.S. sourcing, non-PFE compliance requirements, and rising LFP battery demand could support lithium carbonate prices over the medium term. Other battery chemicals may also see indirect demand support as ESS manufacturing expands.