Battery producer SK On signed a lithium hydroxide provide take care of Chile’s SQM, a transfer that may additional strengthen SK On’s provide chain for crucial battery supplies in dealing with the US “Inflation Discount Act” (IRA) following its current offers with Australian lithium builders.
Beneath the deal, SK On will buy as much as 57,000 tons of high-quality lithium hydroxide for 5 years beginning in 2023. This quantity is sufficient to produce batteries for roughly 1.2 million electrical autos (EVs).
Along with the provision deal, SK On and SQM agreed to debate a mid-to long-term partnership to boost their cooperative relationship, together with extra lithium provide, potential funding in manufacturing crops, and waste battery recycling.
The take care of SQM is anticipated to spice up SK On’s efforts to fulfill the IRA necessities as Chile is a free commerce settlement (FTA) associate with the US. The IRA affords a tax credit score to shoppers after they purchase an EV with batteries outfitted with a sure share of crucial minerals extracted or processed within the US. or within the nations whose FTA with the US is in impact. (Earlier publish.)
Established in 1968 and listed within the Santiago and New York inventory exchanges, SQM is the one lithium hydroxide producer in Chile. SQM is presently one of many lithium-producing corporations with the bottom carbon and water footprint on this planet. SQM joined the Initiative for Accountable Mining Assurance (IRMA) in 2020 to make sure moral and environmentally pleasant lithium mining. In accordance with IRMA requirements, the Atacama website conducts impartial third-party audits in areas reminiscent of employee well being and security, human rights, group engagement, and air pollution management.
SK On has been steadily reinforcing its provide chain for key battery supplies. Final month, it signed a lithium provide take care of Lake Sources to obtain battery-grade lithium for a most 10 years from the fourth quarter of 2024 after buying 10% stake within the Australian agency. (Earlier publish.)
As well as, SK On secured varied contracts on key battery supplies with international suppliers, together with a memorandum of understanding (MOU) on lithium provide with Australia’s World Lithium Sources, a cobalt provide contract with Switzerland’s Glencore, and an MOU with Korea’s POSCO Holdings on complete enterprise cooperation within the battery enterprise.