LG Energy Solution has solidified its foothold in the North American battery market by signing a binding ten year agreement with Smackover Lithium to secure 80,000 metric tons of battery grade lithium carbonate. This massive supply deal is expected to yield enough cathode material to power roughly 1.8 million high performance electric vehicles, each capable of traveling over 500 kilometers on a single charge. By sourcing these materials through Smackover Lithium, which utilizes low carbon direct extraction technology, LG Energy can better align itself with the strict requirements of the US Inflation Reduction Act and reduce its strategic dependence on Chinese chemical suppliers.
The partnership marks a critical step toward creating a closed loop local supply chain in North America, where LG Energy already operates or is building eight different production facilities. For Smackover Lithium, a joint venture between Canada’s Standard Lithium and Norway’s Equinor, this contract serves as a vital pillar for their financial future. According to Standard Lithium CEO David Park, this agreement alongside a previous deal with Trafigura secures nearly ninety percent of the project’s initial annual capacity, clearing a major hurdle as the company moves toward a final investment decision.
Beyond the immediate supply of minerals, the structure of this contract is designed to help facilitate significant debt financing for assets located in Arkansas. The companies are currently working through due diligence with three major export credit agencies that have expressed interest in providing more than one billion dollars in project debt. With an engineering and construction agreement already in place for the site’s central processing facility, the project is rapidly transitioning from planning to execution.
This latest move reflects LG Energy’s broader global strategy to diversify its raw material sources and mitigate geopolitical risks. While this Arkansas venture strengthens its domestic presence, it complements existing large scale contracts with providers like Chile’s SQM and Australia’s Liontown. As the demand for lithium iron phosphate batteries grows across the continent, these regionalized partnerships ensure that manufacturers can keep pace with an accelerating transition to electric mobility without relying on volatile overseas shipping lanes.