South Korean battery maker LG Energy Solution Ltd. (LGES) said Thursday it has signed a non-binding agreement with a US mining company for the supply of two kinds of lithium products used in electric vehicle (EV) lithium-ion batteries.

Under the memorandum of understanding, Compass Minerals, a Kansas-based provider of essential minerals, will provide LGES with 40 percent of the lithium carbonate and lithium hydroxide it will be producing for seven years starting in 2025, LGES said in a release.

Lithium carbonate and lithium hydroxide are the two most common types of lithium products used to make cathode materials for lithium-ion batteries. Cathodes determine the power of the EV battery.

Details on the exact amount of the supply will be finalized when they sign a formal contract, LGES said.

The MOU also includes an option for Compass Minerals to supply up to an additional 40 percent of the production once its lithium brine development project in Utah is at full scale, according to the press release by Compass Minerals.

"Securing key raw materials has become critically important, in order to maintain our lead position in the global battery market," Kim Dong-soo, senior vice president of the procurement center at LG Energy Solution, said in comments posted on the website of Compass Minerals. "We believe partnering up with Compass Minerals will aid in achieving that goal while solidifying supply chains in the US"

Compass Minerals said it will continue "good-faith negotiations" with LGES toward a binding supply agreement.

Compass Minerals is pushing for the development of lithium resources with brine from its facility in the Great Salt Lake in Utah, through a sustainable extraction method using renewable energy like solar and wind power.

LGES has been ramping up efforts to secure the stable supply of key battery components from overseas partners in Australia, Europe and South America, to meet the growing EV demand amid rising raw material costs.

LGES has signed long-term supply contracts with Chile's SQM and Vulcan Energy Resources of Germany for lithium, and similar deals with Sigma Lithium Resources in Brazil and Australian miner Liontown Resources for the supply of lithium ore concentrate. (Yonhap)