The South Korean-based battery company LG Energy Solutions is seeking to secure critical electrical vehicles battery material, lithium hydroxide, from Morocco, through a partnership with Yahua, a leading lithium compound maker in China.
The two companies signed a memorandum of understanding, to ensure that LG Energy could receive the important material from the US free trade agreements partner, Morocco, Korean media reported.
The MoU will strengthen LG’s lithium hydroxide supply chain, which is expected to make the company more flexible in responding to rapidly changing external business environments, such as the US’s Inflation Reduction Act (IRA) and the EU’s Critical Raw Materials Act (CRMA), said the global edition of The Korea Economic Daily.
Morocco has a reputation for being home to many rich mineral sources, one of which is lithium.
“If lithium hydroxide is produced in Morocco, it will be advantageous in meeting the IRA requirements, which provide subsidies only to electric vehicles that use a certain percentage of domestically produced core minerals in the US or in countries that have signed an FTA with the US,” explained the same source.
“Through the synergy of a stable raw material supply chain and Yahua’s excellent manufacturing technology, high-quality lithium hydroxide can be secured,” said an LG Energy Solution official.
The head of the procurement center at LG Energy Solutions explained that this collaboration would strengthen the raw material supply chain in the growing North American and European Union markets while enhancing customer value through increased supply stability as well as quality competitiveness, reported Pickool media.
With Morocco added to the list, LG is seeking the crucial material from several manufacturers such as Liontown resources from Australia, SQM from Chile, and some European providers.
