LG Energy Solution has signed a 10-year binding offtake agreement with Smackover Lithium for 8,000 metric tonnes of battery-quality lithium carbonate annually, securing US-produced material for its North American battery operations. Smackover Lithium, a partnership of Standard Lithium and Equinor, will supply the material from its South West Arkansas (SWA) project using a direct lithium extraction (DLE) process.

The lithium carbonate will meet non-Prohibited Foreign Entity (non-PFE) requirements, a qualification increasingly critical as US battery supply policy tightens. LG Energy Solution operates seven US production facilities, including three standalone sites, most of which have established capacity for lithium iron phosphate (LFP) battery chemistry. Combining Smackover’s Arkansas-sourced material with that manufacturing base completes a locally integrated supply chain from extraction to finished cell.

DLE recovers lithium directly from subsurface brine, avoiding the land and water intensity of conventional evaporation-pond methods. The approach meets the sustainability criteria increasingly required by both automaker customers and energy storage procurement frameworks.

In a statement, Kang Yeol Lee, Procurement Centre Leader of LG Energy Solution, said: “By bringing both battery production and sourcing to the U.S., we will deliver competitive and sustainable products to our customers driving the global energy storage and EV markets.”

David Park, Chief Executive of Standard Lithium, described the agreement as the start of a long-term partnership providing LG Energy Solution with sustainably produced, US-based lithium carbonate. The contracted volumes will be produced through the SWA project, the foundation of Smackover Lithium’s domestic production plan.

Why this matters:

• Non-PFE sourcing lets LG’s batteries qualify for US incentives that Chinese-linked supply chains cannot access.Securing lithium that meets prohibited foreign entity restrictions positions LG’s LFP batteries to remain eligible for American subsidies and content requirements as those rules tighten, a compliance advantage rivals dependent on Chinese lithium processing may struggle to match.
• Pairing domestic lithium sourcing with existing US production capacity closes a supply chain gap most competitors still face.With seven US facilities already built for LFP battery manufacturing, LG’s constraint was upstream material sourcing rather than production capability, making this agreement the missing piece for a genuinely localized supply chain rather than a standalone raw material deal.
• A 10-year offtake commitment suggests LG expects sustained US energy storage demand growth to justify long-term lithium volume.Locking in fixed annual supply over a decade indicates confidence that ESS demand, not just EV batteries, will remain strong enough domestically to absorb that material consistently, rather than hedging with shorter-term or spot-market purchasing.