LG Energy Solution Ltd. said Friday it has signed a long-term agreement with Chile's SQM S.A. for the supply of lithium, a key component in electric vehicle batteries, in the latest move to further bolster the sourcing of raw materials.

Under the agreement, SQM will supply 100,000 tons of lithium to LGES over the next seven years, starting this year through 2029, the South Korean battery maker said in a release.

The amount of supply is equivalent to powering 2 million all-electric vehicles.

The latest agreement replaces the previous agreement LGES clinched with the Chilean lithium supplier with an increase in the volume of the supply by nearly threefold compared with the outstanding supply of 36,000 tons, LGES said.

The supply will include lithium hydroxide used in high-nickel, high-capacity batteries, and lithium carbonate used in the cheaper low-nickel and lithium iron phosphate cells.

LGES, the world's second-largest battery maker, has been stepping up to secure diverse channels for the sourcing of key minerals for secondary batteries amid the robust EV demand.

It has clinched a number of supply deals with mineral companies in Australia and the United States, in efforts to meet the requirements for a US law on giving subsidies to EVs made with components produced or processed in North America or in the territory of its free trade agreement partners. (Yonhap)