SK On inks lithium supply deal with Australia’s Lake Resources

SK On to receive battery-grade lithium for a maximum 10 years after acquiring 10 percent stake in Lake Resources

SK On, a global leading electric vehicle (EV) battery manufacturer, announced it has signed a lithium supply deal with Australia’s Lake Resources, a move that will further strengthen its key battery materials supply chain in response to robust business growth and geopolitical risks. 

Under the agreement signed on Oct 11, SK On anticipates the delivery of battery-grade lithium commencing as early as the fourth quarter of 2024 after acquiring a 10 percent stake in Lake Resources. The offtake deal has an initial five-year term with an option for additional five years.

SK On would be supplied with 15,000 tons of lithium for the first two years and 25,000 tons of lithium from the third year, meaning the Korean battery maker can secure a total of 230,000 tons of lithium – enough to produce batteries for approximately 4.9 million electric vehicles (EVs).

SK On is considering using the supplied lithium at its battery manufacturing plants in the U.S. The first of SK On’s two plants in Georgia began mass production of EV batteries earlier this year, while the second one is expected to be operational in 2023.

BlueOval SK, the joint venture between SK On and Ford Motor Company, is building three plants in the US – one in Tennessee and two others in Kentucky. They are expected to be operational from 2025.

The deal with Lake Resources is SK On’s latest effort to bolster its key battery materials supply chain with Australian mineral developers. On Sep 28, SK On signed a memorandum of understanding (MOU) with Global Lithium Resources for a stable supply of lithium.

In addition to Australia, SK On is also exploring various options to secure the supply of critical battery minerals in countries like Canada, Brazil and Argentina.

SK On Vice President Ryu Jin-suk said, “Lake Resources fits particularly well with SK On’s ESG policy as it utilizes environment-friendly direct lithium extraction technology for production of lithium.” She added, “With this agreement, both parties will strengthen mutual partnership to advance opportunities to secure sustainable sourcing of raw materials in the future.”

Lake Resources CEO David Dickson said, “The agreement cements the ability of Lake Resources to scale up environmentally responsible production.” He added, “We look forward to a long and beneficial relationship with SK On.”