Compass Minerals Signs Binding Multiyear Agreement to Supply LG Energy Solution with Battery-Grade Lithium Carbonate
November 10 2022 - 6:45AM
Business Wire
Compass Minerals (NYSE: CMP), a leading global provider of
essential minerals, today announced the signing of a binding,
multiyear supply agreement to provide LG Energy Solution (LGES;
KRX: 373220), a leading global manufacturer of lithium-ion
batteries for electric vehicles and energy storage systems, with
battery-grade lithium carbonate from its Ogden, Utah solar
evaporation lithium brine development.
Per the terms of the agreement, Compass Minerals would deliver
up to 40% of its planned, phase-one battery-grade lithium carbonate
production to LGES for an initial 6-year term from supply
commencement. Purchase pricing will be based on market index under
the agreement.
As previously announced, the company expects an annual
commercial production capacity of approximately 35 kMT lithium
carbonate equivalent (LCE) once fully operational, with an initial
phase-one capacity of approximately 11 kMT battery-grade lithium
carbonate coming online by 2025.
“This binding supply agreement represents an important milestone
for our company’s entry into a rapidly growing domestic lithium
market,” said Chris Yandell, head of lithium for Compass Minerals.
“We are excited to partner with a proven manufacturing leader like
LGES to help enable the buildout of a robust and secure advanced
battery supply chain.”
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.
“This offtake agreement with Compass Minerals culminates our
continued endeavors to establish a stable supply for critical
minerals in North America, as we adapt to recent regulatory changes
and intensifying competition over key battery raw materials,” said
Dongsoo Kim, Senior Vice President of the Procurement Center at LG
Energy Solution.
The signed supply agreement represents the culmination of
negotiations between Compass Minerals and LGES following the
previously announced signing of a non-binding Memorandum of
Understanding (MOU) between the two companies in June of 2022. The
supply agreement is subject to the successful start of
commercial-scale, lithium carbonate production at Compass Minerals’
Ogden facility and full product qualification. The companies also
expect to negotiate in good faith on a portion of Compass Minerals’
anticipated phase-two production of battery-grade lithium
hydroxide.
Additional information regarding Compass Minerals’ lithium
development plans, including recent announcements on the company’s
selected technology provider, estimated capital and cost intensity,
and the results of a third-party life cycle assessment on phase-one
of development, can be found on the investor section of the
company’s website at investors.compassminerals.com.
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
including, without limitation, statements about the company's
lithium development project, including its expected production
capacity, timing and sustainability. 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/20221109006102/en/
Media Contact Rick Axthelm Chief Public Affairs and
Sustainability Officer +1.913.344.9198
MediaRelations@compassminerals.com
Investor Contact Brent Collins Vice President, Investor
Relations +1.913.344.9111 InvestorRelations@compassminerals.com
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