Investing in suppliers is a method of operating a business that ensures they possess appropriate pricing, rapid response, suitable quality, comprehensive service, and the ability to innovate and iterate. Companies like CATL and BYD are master investors in the industrial supply chain.
Now,Foreign lithium battery companies are also investing in China's raw material producers.
LG New Energy Invests in Lithium Source (Indonesia)
On February 22, Longpan Technology (603906.SH) announced that its third-level affiliated subsidiary, Lishuang (Indonesia), plans to increase its capital and attract investors.LG New Energy plans to invest approximately USD 15.97 million (approximately 116 million RMB) in cash.Purchased 255,930.64 shares of the newly issued common stock of Lithium Source (Indonesia).Secured 20% equity in Lithium Source (Indonesia) following the completion of the new share issuance.
Following the completion of the transaction,Lithium Source (Indonesia) will be jointly held by Lithium Source (Asia-Pacific) and LG Energy Solution, with a 80% stake held by Lithium Source (Asia-Pacific) and a 20% stake by LG Energy Solution.Lithium Source (Asia-Pacific) remains the controlling shareholder of Lithium Source (Indonesia).
Lithium Source (Asia-Pacific) is a wholly-owned subsidiary of Changzhou Lithium Source. Changzhou Lithium Source is controlled by Longpan Technology, specializing in the research and production of lithium iron phosphate cathode materials.
It's worth noting that the third-largest shareholder of Changzhou Lithium Source is Ningbo Meishan Free Trade Port Area Wending Investment Co., Ltd., which holds a 5.9104% stake. The latter is a wholly-owned subsidiary of Ningde Times.Longpan Technology states that this transaction aligns with the company's overall strategic development plan and long-term interests. It is an important step in expanding the company's overseas market, benefiting the company's overall strength in the research and development, market expansion, and mass production of lithium iron phosphate cathode materials. It also strengthens the financial power of the third-tier subsidiary, enhancing its risk resistance and market competitiveness, meeting its financial needs for future development, and carrying positive strategic significance for the company.
From key clients to second-largest shareholder.
LG Energy Solutions is a major customer of Lithium Source (Indonesia).
According to the progress announcement of the "Significant Contract for Daily Operations" released by Longpan Technology on December 24, 2024, its holding subsidiary Changzhou Lithium Source and its third-level held subsidiary Lithium Source (Asia-Pacific) have signed the "Amended Agreement" with LG Energy Solution.The agreement stipulates that Lithium Source (Asia-Pacific) will become a supplier for LG Energy Solution. From 2024 to 2028, Changzhou Lithium Source and Lithium Source (Asia-Pacific) will collectively supply LG Energy Solution with 260,000 tons of lithium iron phosphate cathode material products. The agreement will take effect from December 24, 2024.The total market value of this order, calculated based on market prices, is nearly 10 billion RMB.We have secured the largest transaction contract for the global lithium iron phosphate market in 2024!Now,With the transaction of equity, LG Energy Solution has not only become a major customer of Lithium Source (Indonesia) but also a shareholder.Capacity-wise,The 30,000 tons of lithium iron phosphate project by Lithium Source (Indonesia) is located in the Kendal Industrial Park and officially commenced construction in July 2023. It is scheduled to be completed and operational by 2024.The project successfully shipped its first batch of products in January 2025. The factory currently has the capacity to produce four generations of high-pressure solid products, and the low-temperature spherical T series products, designed for low-temperature environments, have also been included in the production plan.Additionally, the second phase of Lishen (Asia-Pacific) in Indonesia, with a 90,000-tonne lithium iron phosphate production capacity, will officially commence production in 2025.LG Energy Solution Expands Its Layout for Lithium Iron Phosphate
LG Energy has already announced its plan to produce lithium iron phosphate batteries and has secured numerous large orders for these batteries.
For instance, in July 2024, LG Energy announced plans to supply Renault's electric vehicle division.AmpereSupplying lithium iron phosphate batteries. According to the agreement,LG Energy Solution will supply approximately 39 GWh of iron-phosphate lithium batteries to Ampere from the end of 2025 through 2030, which can be used to produce 590,000 electric vehicles.It has been learned that these lithium iron phosphate power batteries will be produced at LG Energy Solution's factory in Poland and will be installed in Ampere's next-generation electric vehicle models.Furthermore,LG Energy Solutions unveils its medium-to-long-term plan, highlighting its commitment to enhance the market competitiveness of its lithium iron phosphate and lithium manganese iron batteries.Based on this, LG Energy Solution has signed cooperation agreements with several cathode material companies in China. For instance, in addition to the collaboration with Changzhou Lithium Source, LG Energy Solution has previously engaged in partnerships with...Huayou Cobalt IndustryThe company has signed an agreement to jointly build a lithium iron phosphate cathode material plant in Morocco. The factory is expected to commence production in 2026, aiming to produce 50,000 tons of lithium iron phosphate cathode materials annually, with plans to supply the North American market.
