SANTIAGO- Chile's SQM, the world's second largest lithium producer, said on Tuesday it had signed a long-term agreement with LG Energy Solution to supply the ultralight battery metal for use in electric vehicles.
The contract will run between 2021 and 2029 and involves the supply of approximately 55,000 metric tons of lithium carbonate equivalent, SQM said in a statement.
"SQM will supply battery-grade lithium carbonate and lithium hydroxide for the production of high-quality cathode material, a key component in electric car battery cells," it said.
South Korea’s LG Chem, an electric car battery supplier for Tesla Inc and GM, said in September that it would separate its battery making business into a new company - LG Energy Solution - to meet growing demand from European car makers and increasing sales of cylindrical batteries used in Tesla cars.
In November, SQM said its plans to boost its production of lithium carbonate and lithium hydroxide, two of its key products, by the second half of 2021 were still on track.
Lithium firms have been ramping up production in anticipation of a flood of demand from automakers in the coming years.
SQM plans to increase its capacity to 180,000 and 30,000 metric tons of lithium carbonate and lithium hydroxide, respectively, by 2023.
(Reporting by Fabian Cambero; writing by Aislinn Laing; editing by Jason Neely) ((Aislinn.Laing@thomsonreuters.com; +56 223704250;))