Australian Mines Ltd signs cobalt and nickel supply deal with LG

Australian Mines Ltd has entered into a six-year agreement to supply South Korea’s LG Energy Solution with key battery metals from its US$1.5 billion Sconi Cobalt-Nickel-Scandium Project in Queensland.

LG Energy, a subsidiary of LG Chem, will purchase 71,000 dry metric tons of nickel and 7,000 dry metric tons of cobalt from Australian Mines starting from the end of 2024, when the company aims to ramp up its battery production for the electric vehicle (EV) market.

The total nickel and cobalt supplied from the Sconi project, which is currently under development, will provide enough raw material to make batteries for 1.3 million EVs with a driving range of over 310 miles per charge.

“Securing key raw materials and a responsible battery supply chain has become a critical element in gaining a greater control within the industry, as the demand for electric vehicles worldwide has heightened in recent years,” said LG Energy CEO Jong-hyun Kim.

The Sconi project will use the eco-friendly dry stacking method to store filtered tailings on the site. Dry stacking removes water from the waste product, leaving a sand-like substance that can be securely stored in management facilities.

The sole condition to the agreement is that Australian Mines must secure financing for the construction of the project before the end of June next year. If secured, the agreement would account for all of the anticipated output of the site.