Battery giant LG inks deal for Australian nickel and cobalt

The world’s largest manufacturer of advanced batteries for electric vehicles, LG Energy Solution, has inked a deal with ASX-listed Australian Mines to source mixed nickel and cobalt from its Sconi Project in North Queensland.

Australian Mines says the off-take deal with the recently rebadged battery storage division of the Korean industrial group, LG Chem is a “major milestone.”

The terms of the agreement will see LGES buy 71,000 dry metric tonnes of nickel and 7,000 dry metric tonnes of cobalt in the form of a mixed hydroxide precipitate (MHP).

Australian Mines says MHP is a nickel and cobalt-containing intermediate product produced at Sconi that can be used as a raw material input for lithium-ion battery production

All told, the off-take deal with LGES is expected to account for 100% of the projected future production of Sconi, making the project a sound proposition for investment.

As part of the deal, however, Australian Mines must secure finance for construction of Sconi on or before the end of June, 2022 – a task the miner said it would “move swiftly” to finalise, as part of discussions with a range of financing partners.

As well as being a major coup for Australian Mines, the deal with LGES is also another feather in the cap of Australia’s battery metals mining industry, following the recent deal between US EV maker Tesla and BHP’s Nickel West division.

As part of the global rush to supply huge global demand for both stationary battery storage and batteries on wheels, demand for ethically sourced cobalt – as well as cobalt and other battery materials with a small carbon footprint – has created a key opportunity for Australia.

As RenewEconomy sister publication The Driven reported last month, nickel is of high importance to Tesla because it wants to make high nickel batteries in a 4680 format that are more energy-dense for applications such as the Tesla Semi electric truck.

Cobalt, meanwhile, is used in lithium-ion batteries across multiple major industries, ranging from consumer electronics to EV batteries, and to the big batteries being installed on grids around the world at a cracking new pace.

The use of cobalt in stationary energy storage has attracted some controversy, however, for its tendency to be more susceptible to problems of “thermal runaway,” which in turn can cause batteries to catch fire.

This is has caused problems for LG, which was last year forced to issue multi-national recalls for its popular RESU10H home battery – including in Australia – due to reports of “thermal events” in the US, and “isolated reports of potential overheating” in Australia.

For its part, Australian Mines has pledged to transition to net-zero carbon under the Australian Government’s Climate Active Program and has partnered with Pangolin Associates, a consultancy working with the Climate Active Program, for this purpose.