Compass Minerals, Overland Park, Kan., on June 29 announced the signing of a nonbinding Memorandum of Understanding (MOU) to supply LG Energy Solution (LGES), Seoul, South Korea, a global manufacturer of lithium-ion batteries, with a battery-grade lithium product from its lithium brine development project at its Ogden, Utah, solar evaporation facility (GM Oct. 29, 2021). Phase one of the Compass project is expected to come up in 2025.
“Our lithium vision is to support the North American battery market by accelerating the development of a sustainable and secure domestic lithium supply chain,” said Chris Yandell, Head of Lithium for Compass. “Entering into this commercial relationship with a proven manufacturing leader like LGES will help enable that vision, as well as assist LGES in solidifying its U.S. supply chain.”
“Securing key raw materials has become critically important, in order to maintain our lead position in the global battery market,” said Dongsoo Kim, Senior Vice President of Procurement Center at LG Energy Solution. “We believe partnering up with Compass Minerals will aid in achieving that goal while solidifying supply chain in the U.S.”
Under the agreement, Compass would commit, for up to seven years initially, at least 40% of its planned, annual phase one production to LGES starting in 2025. The MOU also includes an option for Compass to supply up to an additional 40% annually of the company’s phase two production once the project is at full scale.
The company previously announced an expected annual commercial production capacity of 30,000-40,000 mt of lithium carbonate equivalent (LCE) for the project, with an initial phase one capacity of up to 10,000 mt LCE. Purchase pricing would be based on market price and sales volume thresholds would be dependent upon product qualifications.
Compass is pursuing the sustainable development of an approximately 2.4 million mt LCE resource on the Great Salt Lake, readily available for extraction through existing permits, water rights, and operational infrastructure at the company’s Ogden facility. Compass has leveraged the high mineral concentrations of the GSL for over 50 years to produce sulfate of potash (SOP), salt, and magnesium chloride products.
Compass told Green Markets that the lithium production will not negatively impact the capacity of its other products. SOP capacity at the location is put at 320,000 st/y.
Compass said it will continue good-faith negotiations with LGES toward a binding supply agreement as part of the company’s broader lithium project commercial offtake strategy.
Despite the Compass news, LGES is currently reviewing the “unprecedented economic conditions and investment circumstances in the United States,” according to a June 29 Reuters report citing a statement by LGES. The company told the news services that the review would include a planned $1.3 billion investment in a new battery plant in Queen Creek, Ariz. The project was just announced in March.
LGES is building new battery plants with General Motors Co. in Ohio, Tennessee, and Michigan, and it has an existing plant in Michigan. It also has plants or projects in South Korea, China, Poland, Canada, and Indonesia.