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Dive Brief:

• LG Energy Solution made more moves to secure its North American lithium supply chain this week with a second supply deal with Wesfarmers Chemicals, Energy and Fertilisers.
• WesCEF will provide LG Energy Solution with up to 85,000 tons of lithium concentrate this year to be used in Inflation Reduction Act-compliant batteries.
• The Australia-based chemical producer will use the lithium concentrate to produce up to 11,000 tons of battery-grade lithium hydroxide at its upcoming Mt. Holland project in Western Australia, which is expected to begin production early next year.

Dive Insight:

The critical minerals and raw materials supplied in the partnership will be assembled into products at LG Energy Solution's North America-based manufacturing facilities. The company operates or is building eight facilities across the continent, including its own sites in Michigan and Arizona and six other joint ventures. 

Battery makers like LG Energy Solution continue to wrack up supply deals in a strategy to shorten their U.S.-based supply chains and comply with the IRA.

Companies are pushing to source more battery components from U.S.-allied countries, a difficult task when much of the world's critical mineral supplies, including lithium, is controlled by China. 

As another arm of its strategy to diversify suppliers, LG Energy Solution secured a partnership with Chile-based mining company Sociedad Química y Minera, which is also an investor in the Mt. Holland project. Chile is home to more than 9 million lithium reserves, the most in the world, according to the U.S. Geological Survey. 

In addition to their lithium deal, LG Energy Solution and WesCEF are exploring "strategic opportunities" to partner on upstream minerals and chemical processing. Doing so would help further solidify the battery maker's compliance with the IRA throughout its supply chain — the law's proposed guidance requires that battery materials and critical minerals not be sourced from or processed in China. 

LG and its many subsidiaries have been part of a spate of supplier agreements in recent days as companies across the industry look to build out their end-to-end North American electric vehicle and battery supply chains. 

Earlier this month, LG Chem signed a $19 billion cathode material supply deal with General Motors, providing the automaker with enough battery components to power five million EVs.