(Reuters) - South Korean battery maker LG Energy Solutions (LGES) said on Wednesday it had entered into a non-binding deal for battery-grade lithium supply with Compass Minerals while negotiations for a final agreement were ongoing.
Prices of battery metals including lithium, cobalt and nickel have rallied to multi-year highs due to red-hot demand for electric vehicles (EVs).
Compass is the first U.S.-based lithium producer to partner with the battery manufacturer as it looks to solidify its supply chain in North America to meet soaring demand for EVs, LGES said.
Under the deal, LG would receive as much as 40% of lithium carbonate and lithium hydroxide that Compass produces for seven years, starting 2025.
Separately, LGES which also supplies batteries to Tesla Inc said it was reassessing a $1.3 billion investment plan for an Arizona factory due to "unprecedented" economic conditions.
LGES has also signed deals this year with Vulcan Energy Resources and Liontown Resources for battery minerals.
(Reporting by Akash Sriram in Bengaluru)