SK On
signs lithium hydroxide supply deal with world’s leading producer SQM - SK On to
secure high quality lithium hydroxide for five years starting in 2023, further
strengthening its supply chain in response to the IRA - Partnership
to discuss mid-to long-term cooperation in various fields within the battery value
chain SEOUL, Nov. 6, 2022 ㅡㅡ SK
On, a global leading electric vehicle (EV) battery manufacturer, announced
today it signed a
lithium hydroxide supply deal with Chile’s SQM, a move that will further
strengthen the company’s supply chain for critical battery materials in coping
with the U.S. Inflation Reduction Act (IRA) following its recent deals with
Australian lithium developers. Attended by
Jin Kyo-won, Chief Operating Officer at SK On, and Carlos Díaz, Executive Vice
President Lithium at SQM, the two companies held a signing ceremony for the
lithium deal on November 4 at SK Group’s headquarter Seorin building in Seoul,
South Korea. Under the deal, SK On shall purchase up to 57,000 tons of
high-quality lithium hydroxide for five years starting in 2023. This amount is enough
to produce batteries for approximately 1.2 million electric vehicles (EVs). In addition to the supply deal, SK On and SQM agreed to discuss
a mid-to long-term partnership to enhance their cooperative relationship,
including additional lithium supply, potential investment in production plants,
and waste battery recycling. Prior to the signing ceremony, Diaz and his delegation visited
SK On’s battery plant in Seosan, South Chungcheong Province, and toured the
company’s state-of-the-art manufacturing system. The deal with SQM is expected to boost SK On’s efforts to meet
the IRA requirements as Chile is a free trade agreement (FTA) partner with the
U.S. The IRA is a law that offers a tax credit to consumers when they buy an EV
with batteries equipped with a certain percentage of critical minerals
extracted or processed in the U.S. or in the countries whose FTA with the U.S.
is in effect. Established in 1968 and listed in the Santiago and New York
stock exchanges, SQM is the only lithium hydroxide producer in Chile. Through cooperation with SQM, SK On is expected to not only
stably secure critical minerals, but also further enhance competitiveness in
ESG (environmental, social, governance). SK On has played a leading role in
establishing a sustainable battery supply chain by participating in major
eco-friendly initiatives such as Global Battery Alliance and Responsible
Mineral Imitative. SQM is currently one of the lithium-producing companies with the
lowest carbon and water footprint in the world and is fully committed with the
environment. Consistent with that commitment, SQM joined the Initiative for
Responsible Mining Assurance (IRMA) in 2020 to ensure ethical and
environmentally friendly lithium mining. In accordance with IRMA standards, the
Atacama site conducts independent third-party audits in areas such as worker
health and safety, human rights, community engagement, and pollution control. SK On has
been steadily reinforcing its supply chain for key battery materials. Last
month, it signed a lithium supply deal with Lake Resources to receive
battery-grade lithium for a maximum 10 years from the fourth quarter of 2024
after acquiring 10 percent stake in the Australian firm. In addition, SK On secured various contracts on key battery
materials with global suppliers, including a memorandum of understanding (MOU)
on lithium supply with Australia’s Global Lithium Resources, a cobalt supply
contract with Switzerland’s Glencore, and an MOU with Korea’s POSCO Holdings on
comprehensive business cooperation in the battery business. “The deal
with SQM is a part of our business strategy to support global production
expansion and proactively respond to changes in the external environment,” said
Jin Kyo-won, COO at SK On. “SK On´s supply chain for critical minerals has been
further strengthened in cooperation with SQM, which has proven excellent
quality and reliability.” Carlos Díaz,
Executive Vice President Lithium at SQM said, “We are pleased to strengthen our
business with SK On, a leading battery manufacturer which has been rapidly
increasing its market share in the global battery market.” He added, “We will
create synergy by carrying out various cooperation in the value chain beyond
the supply of lithium hydroxide to SK On.” <END> About SK On SK On is a global leading electric
vehicle (EV) battery developer, manufacturer, and solutions provider whose
mission is to make our world a cleaner and more convenient place. Established in October 2021 after
splitting off a battery business from SK Innovation, South Korea’s largest
energy company, SK On aims to become a world leader in the clean energy
industry by leveraging its global production base and R&D capabilities, as
well as its production and quality management know-how. Headquartered in Seoul, South
Korea, SK On has a worldwide presence with battery plants currently operating
or in construction across the United States, Europe, and Asia.
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