LG Energy Solution (LGES) announced that it has entered into an agreement with Australian company Novonix to jointly develop artificial graphite used as battery cathode materials and could be supplied with more than 50,000 tons of artificial graphite in the next 10 years if the development process goes smoothly.
According to Korean media Bloter, LGES signed a Joint Development Agreement (JDA) and a strategic investment agreement with Novonix, under which both parties agreed that LGES will have exclusive access to all of Novonix's production for a fixed period of time and will purchase at competitive prices.
LGES decided to invest US$30 million in the form of Novonix's convertible notes in order to ensure the stability of the investment and to establish a solid relationship with the core material supplier.
Novonix, founded in 2012 and headquartered in Brisbane, Australia, is a battery cathode material manufacturer with a graphite plant in Tennessee, USA, and an ongoing supply network in North America, capable of responding to the U.S. government's Inflation Reduction Act (IRA).
With this contract, LGES will be able to strengthen its North American core material supply network to more effectively respond to the IRA. According to the Korea International Trade Association (KITA), South Korea imported 91.1% of its artificial graphite from China in 2022. South Korean companies must diversify their negative electrode material supply network as soon as possible if they are to comply with the IRA requirements.
LGES said the partnership with Novonix, which has capacity in North America, will provide a more stable supply of core cathode materials and enable it to respond quickly to customer demand.
Novonix said that through this contract, it will supply high-performance graphite to LGES and will work with LGES to capture the battery market in North America.
Article translated by Judy Lin
