Anson Resources (ASX:ASN) is to supply LG Energy Solution (LGES) with lithium carbonate from the former’s US-based Paradox Basin project in Utah.
Anson shares were up +14.3% to 12cps in the second hour of trades on Wednesday.
Commencement of provisions is expected to kick off in 2027 – one year before Fitch’s Benchmark Mineral Intelligence expects the lithium price to go back into the peak of it ‘pork cycle.’
LGES will take 4,000 dry metric tons (dmt) of lithium carbonate per year with pricing to be determined using a “formula-based mechanism” referencing prices for battery-grade Li-carbonate.
This reflects some 40% of the project’s expected 10,000tpa capacity once it goes live in about three years, all cards in order.
That capacity was inked in a 2022 DFS looking at Paradox’s ‘Phase 1’ of operations.
“This establishes the foundation for a long-term partnership and we are proud that we will be supplying US made lithium from the Paradox Basin to LG Energy Solution, a respected global leader in the lithium battery value chain, building out the largest battery manufacturing capacity in the US,” Anson chief Bruce Richardson said.
“The Inflation Reduction Act and other US policy initiatives have resulted in significant investment in new battery manufacturing in North America to meet the continued growth in demand for electric vehicles in the US.
“We are delighted to have reached agreement with LG Energy Solution allowing us to execute our first binding Offtake Term Sheet for at least 40% of our production.”
LG Energy Solution is a global manufacturer of battery cells.
ASN shares last traded at 12cps.