Lake Resources to supply SK On with lithium
The South Korean battery cell manufacturer SK On has signed a lithium supply contract with the Australian company Lake Resources. In total, the Korean battery manufacturer can purchase 230,000 tonnes of lithium from Lake Resources, which is enough to produce batteries for around 4.9 million electric cars.
SK On expects its first deliveries of battery-grade lithium to start in the fourth quarter of 2024 after acquiring a ten per cent stake in Lake Resources. The Korean company has not disclosed how much it will pay for the stake in the Australian company.
The contract has an initial term of five years with an option for a further five years. SK On is to be supplied with 15,000 tonnes of lithium in the first two years and 25,000 tonnes in the third year. From 2x 15,000 and 8x 25,000 tonnes, the total quantity of 230,000 tonnes therefore only results if the option for the further five years is also taken. In the first five years, the total would be 105,000 tonnes.
SK On has said that it is considering using the delivered lithium in its US factories. The first of SK On’s two plants in Georgia began series production earlier this year (supplying VW in Chattanooga or Ford for the F-150 Lightning, among others), and the second is expected to come on stream in 2023.
In addition, BlueOval SK, the joint venture between SK On and Ford, is reportedly building three battery factories in the US, one in Tennessee and two more in Kentucky. They are scheduled to go into operation from 2025 onwards.
A few days ago, SK On also signed a memorandum of understanding on the supply of lithium with another Australian company, Global Lithium Resources. In addition to Australia, SK On is also exploring various options to secure battery mineral supplies in countries such as Canada, Brazil and Argentina.
Lake Resources was founded in 1997 and is currently developing four lithium brine projects in Argentina. These will use a “direct lithium extraction” (DLE) technique developed by US-based Lilac Solutions, which is expected to lead to “tangible reductions in brine, water and land consumption”.
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.”