Piedmont Lithium Inc (ASX:PLL, NASDAQ:PLL, XETRA:) has inked equity investment and binding offtake agreements with LG Chem for the purchase of some 200,000 tonnes of spodumene concentrate over four years, and an investment of $75 million to acquire PLL common shares.
LG Chem will purchase about 1 million Piedmont shares at a price of about $68.40 per share for a total consideration of $75 million, equalling an interest of about 5.7% in PLL.
Piedmont has agreed to supply LG Chem with 50,000 metric tonnes of spodumene concentrate or SC6 for four years beginning in the third quarter of this year.
Pricing will be based on a formula-based mechanism linked to market prices at the time of each shipment.
Supplying lithium to North America
"We welcome LG Chem as a shareholder in Piedmont and are excited to partner with them to supply North American lithium that will meet the requirements of the IRA and support the development of the U.S. battery supply chain," Piedmont Lithium president and CEO Keith Phillips said.
"LG Chem is a global leader with a commitment to US EV (electric vehicle) battery manufacturing and plans to build one of the world's largest cathode plants in Clarksville, Tennessee.
“We look forward to working with LG Chem as NAL comes online as an important source of lithium in North America."
PLL has also given LG Chem priority rights for 10,000 tonnes per year of lithium hydroxide produced by Piedmont’s proposed facilities in Tennessee or North Carolina.
"This agreement allows LG Chem to provide differentiated values to North American customers with products that satisfy IRA standards by pre-emptively securing raw materials in the US, our key market," LG Chem vice chair and CEO Hak-Cheol Shin said.
"As we work to build various partnerships, including joint metal investments with automotive OEMS and battery makers, we're pleased that our partnership with and commitment of funds to Piedmont will help support its development of U.S. lithium projects."