(Kitco News) - Piedmont Lithium (Nasdaq: PLL) today announced it has signed agreements with LG Chem, under which LG Chem will make a $75 million equity investment in Piedmont and commit to the offtake of 200,000 metric tons of spodumene concentrate ("SC6") from Piedmont's jointly-owned North American Lithium ("NAL").
The company said that LG Chem will purchase 1,096,535 newly-issued shares of Piedmont common stock at an approximate price of $68.40 per share for a total consideration of $75 million.
According to a press release, closing of the subscription agreement is expected on or around February 24, 2023, and will result in LG Chem holding approximately 5.7% of Piedmont common shares.
Piedmont also noted it has agreed to supply LG Chem with 50,000 metric tons per year of SC6 for four years with planned shipments beginning in Q3 2023, adding that SC6 pricing will be determined by a formula-based mechanism linked to SC6 market prices at the time of each shipment.
LG Chem will utilize 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 metric tons per year of lithium hydroxide produced by the company at either of its proposed facilities in Tennessee or North Carolina.
"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 U.S. battery supply chain," said President and CEO Keith Phillips. "LG Chem is a global leader with a commitment to U.S. 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."
NAL is a project of Sayona Quebec, a joint venture between Piedmont and Sayona Mining. SC6 production at NAL is expected to restart in H1 2023, with commercial shipments expected to begin in Q3 2023.
Piedmont said it intends to utilize the funding from LG Chem to advance its portfolio of projects, including its planned 30,000 metric-tons-per-year 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.
LG Chem is a leading global chemical company with a diversified business portfolio in the key areas of petrochemicals, advanced materials, and life sciences. Headquartered in Seoul, Korea, LG Chem has multiple operation sites worldwide and generated consolidated revenue of KRW 51.9 trillion (USD 42.1 billion) in 2022.
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