SK On, Global Lithium Resources sign MOU for stable supply of lithium

Industry

Published: 29 Sep. 2022, 13:05 Updated: 29 Sep. 2022, 16:16

SK On, Global Lithium Resources sign MOU for stable supply of lithium

SK On Vice President Ryu Jin-suk, center right, and Ron Mitchell, managing director of Global Lithium Resources pose for a photo after signing an MOU in Perth, Australia, on Sept. 28. [GLOBAL LITHIUM RESOURCES]

SK On teamed up with Australia-based Global Lithium Resources for the stable supply of lithium, the critical material for making electric vehicle (EV) batteries.

The two companies signed a memorandum of understanding (MOU) Wednesday, promising the supply of spodumene, from which lithium hydroxide can be extracted.

Specific details about the deal will be announced later, the Korean battery maker said.

Also called white oil, lithium is a core material for making cathodes, which account for 40 percent of the production cost of an EV battery.

The prices of lithium have been skyrocketing recently, surging 240 percent on year to $67,000 per ton as of September.

Established in 2018, the ASX-listed Global Lithium Resources is currently partaking in two massive mining projects in Australia. It is predicted that the two mines have some 500,000 tons of lithium reserves.

The latest deal gives SK On the right to purchase some stake in the two projects, the company added.

“This MOU with Global Lithium will strategically support SK On’s global production and help explore potential business opportunities,” said Ryu Jin-suk, vice president at SK On. “I believe that both parties will support each other to help accelerate the growth of business and cooperate further to explore potential opportunities in the EV supply chain.”

Australia is a high potential country for Korean battery makers as it has signed a free trade agreement with the U.S. government. The recently-passed U.S. EV subsidy rules specify that starting from 2023, 40 percent of critical-mineral value will have to come from the United States or countries that the United States has signed free trade agreements with to qualify for $3,750 of credit. That number increases 10 percentage points a year to 80 percent by 2027.

SK On is the world's fifth-largest battery maker. The company currently operates seven factories globally and is in the process of building seven more.

BY SARAH CHEA [chea.sarah@joongang.co.kr]