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LG Chem investing $75M in Piedmont Lithium; 200,000mt spodumene concentrate offtake agreement

Piedmont Lithium 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) over a four-year term.

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. Closing of the Subscription Agreement is expected on or around 24 February 2023, and will result in LG Chem holding approximately 5.7% of Piedmont common shares.

Piedmont 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. 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. 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.

NAL is a project of Sayona Québec, a joint venture between Piedmont and Sayona Mining Limited. SC6 production at NAL is expected to restart in H1 2023, with commercial shipments expected to begin in Q3 2023. Piedmont’s offtake agreement with Sayona Quebec entitles Piedmont to purchase the greater of 113,000 metric tons per year or 50% of the joint venture’s SC6 production. The company’s purchases of SC6 from Sayona Quebec are subject to a floor price of $500/ton and a ceiling price of $900/ton for the life-of-mine term.

Piedmont 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.


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