LG Chem to acquire stake in Piedmont Lithium

LG Chem will purchase 1 096 535 newly-issued shares of Piedmont common stock at an approximate price of US$68.40 per share for a total consideration of US$75 million. Closing of the subscription agreement is expected on or around 24 February 2023, and will result in LG Chem holding approximately 5.7% of Piedmont common shares. transaction details are described in the table at the end of this announcement. Piedmont has agreed to supply LG Chem with 50 000 tpy of SC6 for four years with planned shipments beginning in 3Q23. SC6 pricing will be determined by a formula-based mechanism linked to SC6 market prices at the time of each shipment. LG Chem will utilise the material to support its plans to produce cathode materials for key North American customers as well as the intentions of the Inflation Reduction Act of 2022 (IRA). Piedmont has also agreed to provide LG Chem priority negotiation rights for 10 000 tpy of lithium hydroxide produced by the company at either of its proposed facilities in Tennessee or North Carolina.

Piedmont President and CEO Keith Phillips, said:

“We welcome LG Chem as a shareholder in Piedmont and are excited to partner with them to supply North American lithium that will meet the requirements of the IRA and support the development of the US battery supply chain. LG Chem is a global leader with a commitment to US EV battery manufacturing and plans to build one of the world’s largest cathode plants in Clarksville, Tennessee. We look forward to working with LG Chem as NAL comes online as an important source of lithium in North America.”

Mr. Hak-Cheol Shin, Vice Chairman and CEO of LG Chem, said:

“This agreement allows LG Chem to provide differentiated values to North American customers with products that satisfy IRA standards by pre-emptively securing raw materials in the US, our key market. As we work to build various partnerships, including joint metal investments with automotive OEMs and battery makers, we’re pleased that our partnership with and commitment of funds to Piedmont will help support its development of U.S. lithium projects.”

NAL is a project of Sayona Quebec, a joint venture between Piedmont and Sayona Mining Limited. SC6 production at NAL is expected to restart in 1H23, with commercial shipments expected to begin in 3Q23. Piedmont’s offtake agreement with Sayona Quebec entitles Piedmont to purchase the greater of 113 000 tpy or 50% of the joint venture’s SC6 production. The company’s purchases of SC6 from Sayona Quebec are subject to a floor price of US$500/t and a ceiling price of US$900/t for the life-of-mine term.

Piedmont intends to utilise the funding from LG Chem to advance its portfolio of projects, including its planned 30 000 tpy lithium hydroxide project at Tennessee Lithium, the Ewoyaa Lithium project in Ghana in partnership with Atlantic Lithium, and the fully integrated Carolina Lithium project in development in North Carolina, as well as for general corporate purposes.

Read the article online at: https://www.globalminingreview.com/mining/20022023/lg-chem-to-acquire-stake-in-piedmont-lithium/