Anson has finalised a deal with LG Energy Solution for the supply of lithium from the Paradox brines project in Utah, USA
LG Energy Solution will purchase 4,000dmt per year from 2027 for an initial 5-year term
The supply term may be extended by a further five years by mutual agreement
Special report: Project developer Anson has finalised an offtake deal with LG Energy Solution for the supply of battery-grade lithium carbonate from its flagship Paradox project in southern Utah.
Anson Resources (ASX:ASN) is working with its US subsidiary, A1 Lithium, to develop the Paradox lithium project into one of the largest lithium resources in the US.
The project already boasts 1.5Mt of lithium carbonate equivalent (LCE) and 7.61Mt of bromine following a 45% increase in resources last October.
This included a 6% increase in the indicated resource to 366,737 LCE and 1.91Mt bromine and a 117% increase in the inferred resource to 1.14Mt LCE and 5.7Mt bromine.
Based on a September 2022 DFS – the most advanced of project studies – Paradox is forecast to produce ~13,074tpa of battery-grade lithium carbonate over an initial 10-year project life and produce lower commercial levels up to a production life of 23 years.
Lately, ASN has been conducting extensive exploration and test work of the brine that is known to exist across multiple areas in the lithium-rich Paradox formation.
Anson’s plan to extract lithium from Paradox. Pic via ASN
Joining forces with one of the world’s biggest battery makers for LCE supply
In big news this week, Anson has completed negotiations with one of the world’s biggest battery makers, LG Energy Solution, and executed its first offtake term sheet for the supply of LCE from Paradox.
Under the offtake agreement, ASN will provide the supply of up to 4,000dmt per annum of LCE from 2027, representing approximately 40% of the project start-up production capacity of ~10,000tpa.
ASN says LG Energy Solution is an ideal partner with its diversified customer base of tier one OEMs and strong investment to expanding production in North America.
Currently, the battery maker has eight facilities operating or under construction in North America, with stand-alone facilities in Michigan and Arizona and six joint venture facilities with major automakers.
‘Unstoppable paradigm shift in the US’
“We have recognised the unstoppable paradigm shift in the US supply chain for electric vehicle battery materials and the key role that Korean and Japanese battery manufacturers are playing,” ASN executive chairman and managing director Bruce Richardson says.
A map of the Paradox lithium project’s location and bordering US states. Pic via ASN
“The Inflation Reduction Act and other US policy initiatives have resulted in significant investment in new battery manufacturing in North America,” Richardson also said.
“This shift in manufacturing investment has led to an increased demand for lithium produced in the US, not only to shorten supply chains geographically but also increase US content of electric vehicle batteries and electric vehicles.
“We targeted our offtake marketing activities to the companies that have made these investments into North America and in particular, the US where Anson’s development work in the Paradox Basin in Southern Utah is strategically positioned.
“Our agreement with LG Energy Solution establishes the foundation for a long-term partnership.”
This article was developed in collaboration with Anson Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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