(Yicai Global) June 28 -- Shares in Tianqi Lithium advanced as much as 4 percent today after China’s biggest lithium extractor said a unit will supply South Korean chemicals and electric car battery giant LG Chem with raw materials over a four-year period.

Tianqi Lithium’s share price [SHE:002466] was trading up 2.6 percent at CNY128.98 (USD20) as of 12:30 p.m. China time today. Earlier in the day it reached CNY130.68.

Subsidiary Chengdu Tianqi Lithium will supply LG Chem with lithium hydroxide, a key raw material used in the production of battery cathodes, from Jan. 1, 2023 to Dec. 23, 2026, the parent firm said yesterday.

No details on pricing nor sales volume were given, but the Chengdu, southwestern Sichuan province-based company said that the sales price will be based on a pricing mechanism agreed by both parties.

The pair are long-time partners. Over the three years from 2019 to 2021, Seoul-based LG Chem’s orders accounted for 1.5 percent of Tianqi Lithium’s total sales, amounting to around CNY247 million (USD36.9 million).

The contract will have a positive effect on Tianqi Lithium’s performance over the next three fiscal years, but is unlikely to have an impact this year, it added.

Editor: Kim Taylor