Sigma Lithium Corporation has announced the signing of a binding term sheet for an offtake agreement on a 'take or pay' basis for the sale of 6% battery-grade high purity and environmentally sustainable lithium concentrate to LG Energy Solution (LGES), which is one of the world's largest manufacturers of advanced lithium-ion batteries for electric vehicles.
According to the company, the six-year LGES offtake scales from 60,000 tonne per year in 2023 to 100,000 tonne per year from 2024 to 2027 (guaranteed take-or-pay quantity) subject to Sigma Lithium and LGES executing a mutually acceptable definitive documentation to implement the offtake.
Both the companies also agreed to negotiate each year, starting in 2022, an additional optional supply.
The purchase price for the Battery Grade Sustainable Lithium Concentrate under the offtake will be linked to market prices for the high purity lithium hydroxide during the term of the offtake, the company said.
The offtake is intended to be legally binding on both Sigma Lithium and LGES and is subject to, among other things, completion of the negotiation of definitive written agreement(s), which are to be consistent with the agreed terms contained in the binding term sheet.
Dong Soo Kim, Senior Vice President, Procurement Center, LGES, said, 'With the rapid growth of the EV battery market, securing large volumes of environmentally sustainable and high-quality lithium materials is becoming one of the important sources of competitiveness in our industry. We are delighted to sign this landmark offtake with Sigma Lithium, sourcing environmentally-friendly battery-grade sustainable lithium concentrate directly from the upstream producer and collaborating with Sigma Lithium to make our battery supply chain increasingly more sustainable through our shared focus on innovation and ESG.'
Ana Cabral-Gardner, Co-CEO, Sigma Lithium, said, 'Since 2018, Sigma Lithium has been producing battery-grade sustainable lithium concentrate at its on-site demonstration pilot plant while executing our sustainability roadmap to support decarbonisation and reach net zero emissions by 2024. We believe this offtake will create long-term value for all of our stakeholders.'