Broken Hill Prospecting has shaken hands with Korean technology giant LG.

Shares climbed 40 per cent to 14c on Friday after the news.

Broken Hill (ASX:BPL) and partner Cobalt Blue Holdings (ASX:COB) announced a “major strategic partnership” with LG International (LGI) – the resources investment arm of LG Corporation – for the Thackaringa cobalt joint venture.

Cobalt Blue shares gained 10 per cent to trade at $1.38.

LGI is interested in securing more cobalt, nickel and lithium, key components of lithium-ion batteries, and is working with LG Chem – a developer of next generation batteries for fixed storage and electric vehicles.

LG Chem is the fourth largest electric vehicle battery maker globally.

A lack of supply and rising demand for electric vehicles are making cobalt a particularly hot commodity right now.

BPL shares over the past year.
BPL shares over the past year.

Under the partnership, LGI will provide capital and technical assistance for the Thackaringa joint venture to make a high purity battery grade cobalt sulphate.

“The strategic alliance with LGI is a major win for the Thackaringa cobalt project,” Broken Hill managing director Trangie Johnston told investors.

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Broken Hill spun the Thackaringa project out into Cobalt Blue in February last year.

The company holds the legal title to the Thackaringa tenements and Cobalt Blue can earn up to a 100 per cent by completing a four-stage farm-in.

Cobalt Blue has now inked a binding term sheet with LGI to raise $US6 million ($7.8 million).

Broken Hill has been contacted for comment.