Compass Minerals (NYSE: CMP) signed a non-binding memorandum of understanding June 29 to supply LG Energy Solution, a producer of electric vehicle batteries, with battery-grade lithium products in 2025 from its brine development project at its Ogden, Utah, solar evaporation facility.
Compass Minerals and LGES Strike Lithium Supply Deal to Strengthen U.S. Battery Chain
“Our billion-dollar vision is to enable the North American battery market by accelerating the creation of a sustainable and secure domestic lithium supply chain,” said Chris Yandell, head of the lithium business at Compass Minerals. “Partnering with a proven manufacturing leader like LG Energy Solution (LGES) supports that vision and helps secure LGES’ U.S. supply chain.”
Compass Gears Up for Lithium Production
Compass’ Ogden facility near the Great Salt Lake in Utah currently produces salt, sulfate of potash, and magnesium chloride. Now, the Overland Park, Kansas-based company plans to begin lithium production at the site by 2025 with an initial capacity of up to 10,000 mt/year lithium carbonate equivalent (LCE).
Future expansion phases could scale the facility’s capacity up to 30,000–40,000 mt/year LCE. Compass reports access to approximately 2.4 million mt LCE resources at the Great Salt Lake but has not yet produced lithium.
Details of the LGES Supply Agreement
Under the terms of the agreement, Compass will supply LGES with at least 40% of its initial planned 10,000 mt/year output for up to seven years. The contract also includes an option for LGES to purchase an additional 40% of future capacity, subject to the successful expansion of Compass' lithium operations.
Pricing under the memorandum of understanding (MoU) will be set at market rates, with sales volumes contingent on product qualification levels, according to the joint statement.
Lithium Prices Surge
Seaborne lithium hydroxide was assessed at $76,000/mt CIF North Asia on June 28, up sharply from $31,700/mt in early 2022 and $9,000/mt in early 2021. Lithium carbonate followed a similar trend, priced at $72,500/mt, compared with $33,800/mt in 2022 and just $6,350/mt in 2021, according to S&P Global Commodity Insights.
LGES Expands North American Battery Footprint
“In our ongoing efforts to strengthen our lead in the global battery market, securing core raw materials has become critically important,” said Dongsoo Kim, senior vice president of procurement at LGES. “We believe our partnership with Compass Minerals will support that goal and reinforce supply chains in the U.S.”
LGES, the battery arm of South Korea's LG conglomerate, has been aggressively expanding in North America. Through its joint venture with General Motors, Ultium Cells, it has built two U.S.-based battery gigafactories and is developing a third in Lansing, Michigan.
In March, LGES announced an 11 GWh cylindrical battery plant in Queen Creek, Arizona. It also plans to co-develop Canada’s first large-scale EV battery factory with Stellantis in Windsor, Ontario.
LG’s Broader Materials Strategy
Beyond production, LGES and LG Chem secured recycling and raw materials supply deals with Li-Cycle, a North American battery recycler. The agreements include a 10-year supply of lithium-ion battery scrap and a matching off-take agreement for recovered nickel sulfate.
Internationally, LGES has inked lithium supply deals with Sigma Lithium (Brazil), Infinity Lithium (Spain), Vulcan Energy (Germany), and Liontown Resources (Australia), as it works to secure raw materials globally for its growing network of battery factories.
