Compass Minerals Signs Non-Binding Agreement to Supply LG Energy Solution with Battery-Grade Lithium Product Starting in 2025
June 29 2022 - 8:00AM
Business Wire
Compass Minerals (NYSE: CMP), a leading global provider of
essential minerals, today announced the signing of a non-binding
Memorandum of Understanding (MOU) to supply LG Energy Solution
(LGES; 373220:KS), a leading global manufacturer of lithium-ion
batteries for electric vehicles and energy storage systems, with a
battery-grade lithium product from its lithium brine development
project at its Ogden, Utah, solar evaporation facility.
Per the terms of the MOU, Compass Minerals would commit, for up
to seven years initially, at least 40% of its planned, annual
phase-one production to LGES starting in 2025. The MOU also
includes an option for Compass Minerals to supply up to an
additional 40% annually of the company’s phase-two production once
the project is at full scale. The company has previously announced
an expected annual commercial production capacity of 30 kMT to 40
kMT lithium carbonate equivalent (LCE) for the project, with an
initial phase-one capacity of up to 10 kMT LCE coming online by
2025. As outlined in the MOU, purchase pricing would be based on
market price and sales volume thresholds would be dependent upon
product qualifications.
“Our lithium vision is to support the North American battery
market by accelerating the development of a sustainable and secure
domestic lithium supply chain,” said Chris Yandell, head of lithium
for Compass Minerals. “Entering into this commercial relationship
with a proven manufacturing leader like LGES will help enable that
vision, as well as assist LGES in solidifying its U.S. supply
chain.”
As previously announced, Compass Minerals is pursuing the
sustainable development of an approximately 2.4 mMT LCE resource on
the Great Salt Lake, readily available for extraction through
existing permits, water rights and operational infrastructure at
the company’s Ogden facility, the largest of its kind in the
Western Hemisphere.
“Securing key raw materials has become critically important, in
order to maintain our lead position in the global battery market,”
said Dongsoo Kim, senior vice president of procurement center at LG
Energy Solution. “We believe partnering up with Compass Minerals
will aid in achieving that goal while solidifying supply chain in
the U.S.”
Compass Minerals will continue good-faith negotiations with LGES
toward a binding supply agreement as part of the company’s broader
lithium project commercial offtake strategy.
About Compass Minerals
Compass Minerals (NYSE: CMP) is a leading global provider of
essential minerals focused on safely delivering where and when it
matters to help solve nature’s challenges for customers and
communities. The company’s salt products help keep roadways safe
during winter weather and are used in numerous other consumer,
industrial, chemical and agricultural applications. Its plant
nutrition products help improve the quality and yield of crops,
while supporting sustainable agriculture. Additionally, the company
is pursuing development of a sustainable lithium brine resource to
support the North American battery market and is a minority owner
of Fortress North America, a next-generation fire retardant
company. Compass Minerals operates 12 production and packaging
facilities with nearly 2,000 employees throughout the U.S., Canada
and the U.K. Visit compassminerals.com for more information about
the company and its products.
Forward Looking Statements and Other Disclaimers
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including, without limitation, statements about the company's
lithium development project, including its expected production
capacity, vision, sustainability, and the potential execution and
terms of any binding supply agreement. These statements are based
on the company’s current expectations and involve risks and
uncertainties that could cause the company’s actual results to
differ materially. The differences could be caused by a number of
factors including those factors identified in the “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” sections of the company’s Transitional
and Quarterly Reports on Forms 10-KT and 10-Q, as well as the
company’s other SEC filings. The company undertakes no obligation
to update any forward-looking statements made in this press release
to reflect future events or developments, except as required by
law.
The company has completed an initial assessment to define the
lithium resource at Compass Minerals’ existing operations in
accordance with applicable SEC regulations, including Subpart 1300.
Pursuant to Subpart 1300, mineral resources are not mineral
reserves and do not have demonstrated economic viability. The
company’s mineral resource estimates, including estimates of the
lithium resource, are based on many factors, including assumptions
regarding extraction rates and duration of mining operations, and
the quality of in-place resources. For example, the process
technology for commercial extraction of lithium from brines with
low lithium and high impurity (primarily magnesium) is still
developing. Accordingly, there is no certainty that all or any part
of the lithium mineral resource identified by the company’s initial
assessment will be converted into an economically extractable
mineral reserve.
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version on businesswire.com: https://www.businesswire.com/news/home/20220628006192/en/
Media Contact Rick Axthelm Chief Public Affairs and
Sustainability Officer +1.913.344.9198
MediaRelations@compassminerals.com
Investor Contact Douglas Kris Senior Director of Investor
Relations +1.917.797.4967 krisd@compassminerals.com
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