SK Innovation, EcoPro BM sign cathodes deal

[ECOPRO BM]

SK Innovation signed a 10-trillion-won ($8.5 billion) deal with Korean cathodes supplier EcoPro BM for high-nickel cathodes.

Under the deal, EcoPro BM will supply high-nickel cathodes worth 10.1 trillion won to SK Innovation’s battery manufacturing facilities in and outside of Korea from January 2024 to December 2026.

The two companies also agreed Thursday to collaborate in other ways in the cathodes business such as making joint investments and establishing manufacturing facilities.

“With EcoPro, SK Innovation plans to lead the battery cathodes industry, in which demand is expected to grow at an exponential rate,” SK Innovation said in a release Thursday. “Aside from securing enough cathodes, the two companies are going to collaborate on the battery materials business in order to increase their competitiveness.”

Cathodes are a core material in batteries along with anodes, separators and electrolytes.

They play a vital role in deciding the price of a battery because they account for up to 50 percent of a battery's cost.

EcoPro BM, the cathodes manufacturing subsidiary of EcoPro, specializes in high-nickel cathodes, in which the portion of nickel is higher than other materials such as cobalt and manganese. High-nickel cathodes offer better performance but safety is a crucial issue because they lack stability.

SK Innovation has been developing batteries using high-nickel cathodes. It plans to supply NCM9 batteries, in which 90 percent of the cathodes materials is nickel, for Ford's all-electric Lightning pick-up truck, slated for launch next year. The NCM9 batteries were developed in collaboration with EcoPro BM.

"Collaboration with our strong partner EcoPro BM will continue not only in the high-quality battery manufacturing business but also in the core battery material business," said Ji Dong-seop, head of SK Innovation's battery business.

EcoPro BM is the second-largest company on the Kosdaq by market capitalization.

The company's shares closed at 357,600 won on Thursday, a 6.21 percent jump compared to the previous trading day.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]