Ganfeng, LG Chem sign LiOH supply deal

Chinese lithium producer Jiangxi Ganfeng Lithium has signed an agreement for lithium hydroxide supplies with South Korean electronics manufacturer LG Chem.

Ganfeng has agreed to supply to LG Chem 47,600t of lithium hydroxide from 1 January 2019 to 31 December 2022, with the contract prices subject to market conditions.

Ganfeng is one of China's largest value-added lithium producers and is active in exploring for global lithium resources. It has entered into a strategic collaboration with Canada-based Lithium Americas to develop lithium resources in the Americas.

The firm will have a capacity of 75,000 t/yr for lithium carbonate equivalent by the end of 2018. It has an offtake agreement with Australian developer Pilbara Minerals for the first stage of its Pilgangoora lithium project in Western Australia (WA). It owns 43.1pc of the Mount Marion lithium project in WA where it is the offtake partner.

LG Chem is a major producer of rechargeable lithium-ion batteries for use in electric vehicles and consumer electronics. It has plans to expand its battery operations, building a plant in Poland that will be able to manufacture 100,000 batteries a year. The company has signed two joint-venture agreements with China's Huayou Cobalt aimed at producing lithium-ion battery materials.

Spot prices for 56.5pc grade hydroxide are under downwards pressure, moving down to 129,000-134,000 yuan/t today from the 14 August assessment of Yn132,000-138,000/t. Export prices remain stable at $17-20/kg fob, with large producers focused on fulfilling orders.