Join our daily newsletter At The Bell to receive exclusive market insights
- Australian Mines (AUZ) signs an offtake deal for mixed nickel-cobalt hydroxide from the Sconi Project in North Queensland
- LG Energy Solutions (LGES) will purchase 71,000 dry metric tonnes of nickel and 7000 dry metric tonnes of cobalt
- The deal has an initial term of six years but may be extended by another five upon mutual agreement
- It’s scheduled to take effect on July 1, 2024, and is conditional on Australian Mines securing financing for construction at Sconi by June 30, 2022
- Shares in Australian Mines are up 35 per cent at 2.7 cents at 11:04 am AEST
Australian Mines (AUZ) has signed a binding offtake agreement with LG Energy Solution for mixed nickel-cobalt hydroxide from the Sconi Project in North Queensland.
A subsidiary of Seoul-based LG Chem, LG Energy Solutions (LGES) is the world’s largest producer of batteries for the booming electric vehicle market.
According to this morning’s announcement, LGES has agreed to purchase 71,000 dry metric tonnes of nickel and 7000 dry metric tonnes of cobalt in the form of a mixed hydroxide precipitate (MHP) — 100 per cent of the projected future production at Sconi.
With an initial term of six years, the supply deal — which may be extended for another five years upon mutual agreement — is equivalent to the production of batteries for 1.3 million electric vehicles, each with a driving range of more than 500 kilometres on a single charge.
President and CEO of LG Energy Solution Jong-hyun Kim said of the agreement: “Securing key raw materials and a responsible battery supply chain has become a critical element in gaining a greater control within the industry, as the demand for electric vehicles worldwide heightened in recent years.
“LGES will solidify its position as the world’s leading battery manufacturer through a steady supply of raw materials for EV batteries.”
The agreement is scheduled to take effect on July 1, 2024, and is conditional only on Australian Mines securing financing for construction work at Sconi by June 30, 2022.
As a result, the company said it is acting “swiftly” to finalise agreements with a range of financing partners.
Shares in Australian Mines were up 35 per cent at 2.7 cents at 11:04 am AEST.
