EcoPro Innovation will procure lithium carbonate from Australian lithium firm Ionner, the South Korean firm said on Thursday.
EcoPro Innovation will convert the lithium carbonate into lithium hydroxide to use it as raw material to manufacture high-nickel cathode.
It will receive 7,000 metric tonnes of the material per year for next three years.
EcoPro Innovation will get an initial batch of 2,000 metric tonnes within the year and receive 5,000 metric tonnes by the first quarter of 2020.
Ioneer manufactures 26,000 metric tonnes of lithium carbonate and 22,000 metric tonnes of lithium hydroxide per year at its lithium mine in Nevada. The company also makes 174,400 metric tonnes of boric acid per year. This allows Ioneer to supply lithium at competitive prices.
Ioneer’s deal with EcoPro is its first long-term contract. The amount it will be supplying to the Korean firm for the next three years will be 34% of its total production volume.
Last year in April, EcoPro began construction of a lithium hydroxide factory at Pohang with 73 billion won.
Lithium hydroxide is in high demand from the rapid growth of the electric vehicle market. The material is used to synthesize nickel used in battery cathodes. Higher nickel means the batter can offer longer traveling distance per charge.
LG Energy Solution, Samsung SDI and SK Innovation are manufacturing batteries with over 80% nickel. This trend has increased lithium hydroxide prices.
According to the Korea Mineral Resource Information Service, a tonne of lithium hydroxide costed 50,000 yuan in December 2020. This increased by 92% to 96,000 yuan by June, 2021.
Market research firm SNE Research said high-nickel batteries to accounted for 8.4% of the total in 2020 but this will increase to 34.8% in 2030.