SK On signs supply deal with Chile's SQM to source lithium

Home > Business > Industry

print dictionary print

SK On signs supply deal with Chile's SQM to source lithium

Carlos Diaz, left, senior vice president at SQM's potassium-lithium operations, and Jin Kyo-won, chief operating officer at SK On, take a photo after signing a lithium supply deal on Nov. 4 at SK On headquarters in Jongno District, central Seoul. [SK ON]

Carlos Diaz, left, senior vice president at SQM's potassium-lithium operations, and Jin Kyo-won, chief operating officer at SK On, take a photo after signing a lithium supply deal on Nov. 4 at SK On headquarters in Jongno District, central Seoul. [SK ON]

SK On signed a supply deal with Chile-based Sociedad Química y Minera de Chile (SQM) to source lithium, a core mineral for making electric vehicles (EVs) batteries. 
 
Under the deal, SK On will source a total of 57,000 tons of lithium hydroxide starting from next year to 2027. Lithium hydroxide is one of the core materials to make cathodes, which account for 40 percent of the production cost of an EV battery.
 
That is enough to make batteries for 1.2 million EVs. 
 
The two companies also 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.
 
Established in 1968, NYSE-listed SQM is the only lithium hydroxide manufacturer in Chile.
 
The latest deal with SQM is expected to boost SK On’s efforts to meet the Inflation Reduction Act (IRA) requirements as Chile is a free trade agreement (FTA) partner with the U.S. 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 with which the United States has signed free trade agreements to qualify for $3,750 of credit. That number increases by 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]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)