LG Energy Solution is extending its Canadian battery supply chain with a preliminary supply deal and financial backing for an Australia-based miner developing a lithium project in Northern Ontario.
The global battery producer announced May 19 it had signed an offtake term sheet and agreed to invest a AUS $20 million (about CDN $18 million) in Green Technology Metals (GT1). The deal will grant LGES the right to purchase 25 per cent of the output from GT1’s Seymour Lithium project north of Thunder Bay, Ont. for the mine’s first five years in production.
The agreement will help LGES “expedite” the electric-vehicle transition in North America, said Myung Hwan Kim, chief procurement officer for the South Korea-based battery manufacturer.
“We have always been committed to expanding our supply chain in North America, as a steady supply of critical minerals, including lithium, is key to ensuring reliable and timely delivery of our innovative power solutions,” he said in a release.
While the backing of LGES is a vote of confidence for the Seymour Lithium project, the mine remains at the exploration stage.
GT1 is currently working through a preliminary economic assessment on the site just north of Lake Nipigon. Pending permitting, financing and community consultations, the company aims to start construction on the mine in mid-2024 and produce its first lithium-rich spodumene concentrate in 2025.
The Australian miner said the funds from the LGES investment will go toward pushing the Ontario development through the exploration and feasibility stages.
The supply deal adds another LGES link to Canada, following up on several battery materials deals struck last year with miners in Ontario and Manitoba. The company has also partnered with Stellantis to build a $5 billion battery manufacturing plant in Windsor, Ont. that is scheduled to open in 2024.