LG Energy Solution (LGES) has agreed to ethically take 100% of the cobalt and nickel from Australian Mines Limited which will be supplied in the form of mixed hydroxide precipitate (MPH) from the proposed Sconi Project in Queensland.
This will enable LG Energy Solution access to:
71,000 tonnes of nickel.
7,000 tonnes of cobalt.
Enough raw materials to produce 1.3 million high-power electric vehicles (EVs).
The six-year supply deal would provide LG Energy Solution with enough raw resources to produce at least 1.3 million electric vehicles, with a driving range exceeding 500 kilometres on a single charge.
The newly acknowledged offtake agreement enables LG Energy Solution the ability to purchase EV battery materials from Australian Mines’ flagship Sconi Project situated in Queensland, Australia. Currently, under development, the USD $1.5 billion dollar mining project will be capable of producing refined and premium quality battery materials and will bolster the battery supply chain for future productions.
The collaboration between Australian Mines Limited and LG Energy Solution will supply a strong foundation for obtaining a stable supply of key materials for EV batteries, as the demand for electric vehicles increases across the globe and the competition between companies for materials grows.
In addition to finding and securing raw materials, LG Energy Solution also aims to acquire such materials through ethical means, reducing the amount of environmental harm done during the process of extraction. This comes as a priority for LG Energy Solution as they opt to raise their ESG and CSR management during the full life cycle of a battery.
As such, during the mining procedures, Australian Mines will be using a more sustainable means to mine called the dry stacking method. This method, although more costly than conventional mining techniques, is considered a more environmentally friendly way to extract the raw materials from the ground.
Dry stacking is one of the most sustainable methods used to store filtered tailings—the silty, sandy materials that are left over once the metals have been extracted. During the dry stacking method, tailings are placed and compressed in a mound that is simultaneously reclaimed with native soil and flora. In this process, there is no requirement for a dam or ponds to hold them in place, no risk of a dam failure, and no issue of long-term storage. Furthermore, due to the composition, the tailings are non-acid generating.
How does dry stacking work?
Large rocks are crushed in the mine.
Minerals such as nickel and cobalt are separated.
Tailings are dewatered.
Water is reused in the processing plant.
The filtered tailings are delivered to the dry stack facility.
Tailings are compressed into a stable mound.
The dry stack facility is simultaneously reclaimed with native soil and flora.
Traditionally, the leftover tailings would be dumped directly into streams, rivers, and lakes or disposed of in underground quarries and pits, leading to the possibility of toxic material leakage.
Australian Mines has also recently become a member of the Initiative for Responsible Mining Assurance, the IRMA. This signals that they support and participate in a third-party verification and certification process whilst adhering to a comprehensive best-practice standard that addresses environmental and social issues related to industrial-scale mines.
Whilst LG Energy Solution takes hold of its position as the world’s leading battery manufacturer, they are also ensuring that they are taking great care and consideration for the ethical and transparent management and supply chain of its resources. Fulfilling their social duty and responsibility for enhancing its competitiveness in ESG management.
“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,” said Jong-hyun Kim, President and CEO of LG Energy Solution. “LGES will solidify its position as the world’s leading battery manufacturer through a steady supply of raw materials for EV batteries.”
LG Energy Solution has been busy securing key raw materials for EV batteries. The company has invested KRW $12 billion to Queensland Pacific Metals (QPM) in June for 7,000 tonnes of nickel and 700 tonnes of cobalt per year for a decade starting late 2023.
Previously, LG Energy Solution has also made an investment of KRW $57.5 billion in the European subsidiary of Solus Advanced Materials in December securing a supply of copper foil for 5 years starting from 2021.