Ganfeng, Hyundai Enter Long Term Lithium Supply Deal

China’s leading lithium producer, Ganfeng Lithium, has announced that it has entered into a supply agreement with South Korea’s Hyundai Motor. The auto firm claims that the new deal reflects the automotive industry’s strategic move to secure raw material sources amid the electric vehicle (EV) revolution.

The long-term deal entails Ganfeng supplying Hyundai with battery-grade lithium hydroxide products, with the specific sales volume contingent upon final purchase orders, as outlined in a stock exchange announcement by Ganfeng.

Ganfeng said that the contractual period spans from January 1, 2024, to December 31, 2027, and was established following a comprehensive evaluation of the current lithium market conditions. This collaboration is poised to address Hyundai’s lithium requirements, a crucial component in battery manufacturing, while simultaneously enhancing the profitability of Ganfeng, as stated in the announcement.

Ganfeng anticipates positive impacts on its operational outcomes throughout the duration of the agreement.

Hyundai announced on its annual investor day in June 2023, that it will be investing a mammoth $28 billion in the next decade as part of a strategy to boost electric vehicle (EV) sales. To increase its competitiveness in batteries and come up with next-generation batteries, Hyundai will also be investing $7.4 billion in the coming 10 years. Secured Lithium supply chain is a key part of the auto-conglomerate’s strategy.

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Ganfeng is known for its comprehensive lithium series product supply. The Chinese firm boasts a production capacity exceeding 40 lithium compounds and lithium metal products. Its supplies have great demand in the realms of electric vehicles, aerospace, functional materials, and pharmaceuticals.

The specific focus of its agreement with Hyundai is on battery-grade lithium hydroxide, a key ingredient in lithium-ion battery production. Ganfeng is also actively engaged in power battery development. The company introduced its first-generation solid-state battery in 2021 and by May 2023, Ganfeng had commenced mass production of its inaugural solid-state battery, boasting an impressive energy density of up to 260 Wh/kg. The production line was configured for an annual capacity of 4 GWh, marking significant progress in the company’s foray into advanced battery technologies.