LG Energy Solution Signs Multi-Year Offtake Agreement for U.S.-Produced Lithium Carbonate
Key Takeaways
- •Smackover Lithium, a partnership between Standard Lithium and Equinor, will supply LG Energy Solution with 8,000 metric tonnes of lithium carbonate annually under a 10-year binding offtake agreement.
- •The lithium carbonate will come from the South West Arkansas Project, with construction expected to begin in 2026 and first commercial production targeted for 2029.
- •The lithium will be produced using direct lithium extraction and purification, a method not yet deployed at large commercial scale.
- •LG Energy Solution operates seven U.S. production facilities, most with capacity for LFP batteries, and says the deal completes an integrated local supply chain from sourcing to production.
- •The agreement reflects an industry shift toward regionalized supply chains supported by U.S. incentives such as the Inflation Reduction Act.
LG Energy Solution has signed a multi-year binding offtake agreement with Smackover Lithium for battery-quality lithium carbonate.
Under the contract, Smackover Lithium — a partnership between Standard Lithium and Equinor — will supply LG Energy Solution with 8,000 metric tonnes of lithium carbonate annually over a 10-year period. The material will come from the South West Arkansas (SWA) Project located in Arkansas, part of the broader Smackover formation region that has drawn investment from multiple companies pursuing U.S.-based lithium production. Construction of the project is expected to begin in 2026, with first commercial production targeted for 2029.
The deal reflects a broader shift in the battery industry toward regionalized supply chains, driven in part by U.S. policy incentives such as the Inflation Reduction Act, which ties tax credits for electric vehicles and storage products to domestic sourcing and manufacturing of critical minerals and battery components.
"We are pleased to begin this partnership with Smackover Lithium and the agreement marks another step toward establishing a solid and resilient supply chain that keeps our products competitive in key strategic markets," said Kang Yeol Lee, Procurement Center Leader of LG Energy Solution. "By bringing both battery production and sourcing to the U.S., we will deliver competitive and sustainable products to our customers driving the global energy storage and EV markets."
LG Energy Solution operates seven production facilities in the United States, including three standalone sites, and most of them already have established production capacity for batteries using LFP chemistry. Lithium carbonate is a key feedstock for LFP cells, and LG Energy Solution has been expanding its LFP production for the energy storage market. By combining its U.S. manufacturing footprint with Smackover Lithium's lithium carbonate, the company says it has secured a fully integrated local supply chain spanning sourcing through production.
Smackover Lithium's lithium carbonate will be produced using a direct lithium extraction (DLE) and purification process, which the companies say ensures a more sustainable supply of materials. DLE is an emerging extraction method being tested across several U.S. projects as an alternative to conventional evaporation ponds and hard-rock mining, though it has not yet been deployed at large commercial scale.
"We are excited to be entering into this agreement with LG Energy Solution," said David Park, CEO of Standard Lithium. "We expect this to be the beginning of a long and mutually beneficial partnership whereby we will provide LG Energy Solution with a long-term supply of U.S.-based and sustainably produced battery-quality lithium carbonate."
The announcement was made by LG Energy Solution.
