LG Chem has forged a deal with US energy giant ExxonMobil to secure up to 100,000 metric tons of lithium, a key material for cathodes used in electric vehicle batteries.

According to the company, LG Chem Vice Chairman and CEO Shin Hak-cheol and ExxonMobil Senior Vice President Dan Holton signed a memorandum of understanding on Wednesday in Seoul. The deal price was not revealed immediately.

Under the agreement, ExxonMobil will supply lithium extracted from its Arkansas brine fields to LG Chem’s cathode materials manufacturing plant in Tennessee for 10 years from 2030. Located approximately three hours from the brine source, the Tennessee facility boasts an annual production capacity of 60,000 tons of cathode, sufficient to power 600,000 high-performance EVs.

ExxonMobil began lithium mining in Arkansas last year using direct lithium extraction technology, which involves a natural evaporation process to minimize carbon emissions compared to traditional mining methods that use explosives. Sources estimate that the brine fields hold 4 million tons of lithium carbonate, enough to produce batteries for 50 million EVs.

“This deal signifies a major partnership with ExxonMobil, the world’s largest fuel company,” stated Shin. “LG Ghem will continue to expand its global supply chain for critical raw minerals.”

The two companies also plan to collaborate on the research and development of advanced Reverse Osmosis Membrane filters used in direct lithium extraction. These filters can accelerate the lithium concentration process from months to hours. LG Chem has already supplied 10,000 filters to China-based CITIC Group which started a lithium extraction project last year in Guoan, central China.

LG Chem said the partnership with ExxonMobil marks another achievement in establishing a stable supply chain that connects lithium, cathode materials and EV batteries within North America. Last year, LG Chem became the first Korean company to secure a deal with the US mining company Piedmont Lithium for 200,000 tons of lithium through 2027.

This move aims to reduce dependence on lithium imports from China in light of tighter US Inflation Reduction Act regulations, which restrict tax credits for EVs using critical minerals from a Foreign Entity of Concern. According to data from the Korea International Trade Association, South Korea is the largest export destination for China’s lithium hydroxide, accounting for 71.7 percent of China’s total exports in 2023.