HOME > News

SK On to Purchase 230,000 Tons of Lithium from Lake Resources

published: 2022-11-03 9:30

The boom in the Li-ion battery market has caused supply to tighten for metals such as lithium, cobalt, and nickel. Hence, the major suppliers for NEV power batteries have been in a fierce competition over sources of related metal ores. On October 12, South Korea’s SK On, which is among the global leading suppliers for NEV power batteries, announced that it has signed an investment and procurement agreement with Australia’s Lake Resources, which develops and operates lithium mining projects.

According to the agreement, SK On will first acquire a 10% stake in Lake Resources. Afterwards, SK On will be able to purchase up to 230,000 tons (metric tons) of battery-grade lithium from Lake Resources. Shipments will begin in the fourth quarter of 2024 at the earliest, and the procurement deal has an initial term of five years with an option for additional five years. For the first two years, SK On will receive 15,000 tons. From the third year onward, it will receive 25,000 tons annually. This means that SK On will have to extend the procurement deal to 10 years in order obtain a total of 230,000 tons.

Established in 1997, Lake Resources currently focuses on developing mining projects in the “Lithium Triangle” of South America. In Argentina, Lake Resources possesses at least three lithium brine projects (Olaroz-Cauchari, Paso, and Kachi) and one lithium pegmatite project (Catamarca). The company has adopted a method developed by US-based Lilac Solutions so as to efficiently extract lithium from brine while minimizing environmental impact.

SK On was initially the battery business unit of SK Innovation but later separated from the parent company to become an independently operated entity in 2021. SK On focuses on the development of Li-ion batteries with a high-nickel cathode. In terms of production capacity, SK On currently operates seven factories located in South Korea, the US, Hungary, and China. It is also building seven more.

Earlier this September, SK On also inked a non-binding MOU with another Australian lithium supplier, Global Lithium Resources. The latter is expected to provide the former with a stable supply of spodumene, and both parties will collaborate in development of mining projects and other related business opportunities. In particular, SK On will have opportunities to invest, raise capital, and make acquisitions.

Global Lithium was established in 2018 and listed on the Australian Stock Exchange in 2021. It has two major lithium projects in Australia’s Goldfields Region (Western Australia), which is well-known for its massive reserve of lithium ores.

It is also worth mentioning that SK On and South Korea’s steel titan POSCO inked an MOU for cooperation in businesses related to second-life batteries and battery recycling. They will work more closely along the battery value chain so as to effectively recover the key materials from the electrodes of decommissioned batteries.

This article is a translation of a Chinese article posted by TrendForce. It contains information that is either sourced from other news outlets or accessible in the public domain. Some Chinese names are transcribed into English using Hanyu Pinyin.

announcements add announcements     mail print