Australia's Anson signs lithium supply deal with LG Energy Solution; shares soar
FILE PHOTO: Battery cells with the logo of LG Energy Solution are displayed at the company headquarters in Seoul, South Korea, April 23, 2024. REUTERS/Kim Hong-Ji/File Photo
Australian miner Anson Resources signed an offtake deal with South Korea's LG Energy Solution on Wednesday for the supply of battery-grade lithium carbonate, sending its shares nearly 25 per cent higher.
Under the agreement, the South Korean battery manufacturer will acquire up to 4,000 dry metric tons of lithium carbonate annually from Anson's project within the Paradox Basin in southern Utah, in the United States, with supply anticipated to commence in 2028.
The agreement features an initial five-year term, with the option for a potential five-year extension.
The deal represents nearly 40 per cent of the project's start-up production capacity, estimated at around 10,000 tons annually, with the partnership anticipated to support Anson's debt funding efforts at the final investment decision stage.
"This definitive offtake agreement establishes the foundation for a long-term partnership, and we are proud that we will be supplying low-cost U.S.-made lithium from the Paradox Basin to LG Energy Solution," Anson CEO Bruce Richardson said.
Anson's stock surged as much as 24.7 per cent, as of 0045 GMT, posting its strongest intraday gain in more than two months, while the benchmark ASX 200 slipped 0.6 per cent.
Prices of lithium, a key material in batteries for electric vehicles, have been mired in a year-long downturn due to slower-than-expected EV uptake.
The agreement is "a company-making deal for Anson, but one it was always going to strike somewhere. LG has won the race, and these commitments point to a firming of U.S. battery manufacture", said Michael McCarthy, CEO of Australia and New Zealand at trading platform Moomoo.
The deal, in broader terms, shows that battery technology remains a key component, McCarthy added.
