SK On said it has signed a supply agreement with Posco Holdings to secure up to 25,000 tons of lithium. This move is part of SK On’s plan to reduce its dependence on China for battery raw materials.
The deal will help SK On diversify its supply chain and ensure a stable supply of lithium, which is an important material used in electric vehicle batteries.
Senior executives, including Park Jong-jin and Lee Jae-young, attended the signing ceremony held at SK On Green Campus in Seoul on Tuesday.
SK On has signed a long-term agreement with Posco Holdings to secure up to 25,000 tons of lithium. The signing ceremony took place at SK On Green Campus in Seoul, where executives Park Jong-jin and Lee Jae-young were present. This deal supports SK On’s plan to reduce reliance on China for battery materials.
Under the agreement, SK On will receive lithium sourced from Posco Argentina’s salt lake operations in the Hombre Muerto region. The supply is enough to produce batteries for about 400,000 electric vehicles (EVs). The lithium will mainly be used for SK On’s EV battery projects in Europe and North America, where automakers prefer materials sourced outside China. The company is also considering using the lithium for energy storage systems and battery recycling.
Lithium is a key material used in battery cathodes and plays a big role in battery costs. Cathodes make up about 40% of total battery production costs, and lithium accounts for around 30% of cathode costs. Since most lithium processing happens in China, securing a stable supply from other countries has become very important due to growing geopolitical risks.
“This agreement is part of our supply chain diversification strategy to strengthen mid- to long-term raw material stability and sourcing competitiveness,” stated Park. “We will continue expanding SK On’s raw material capabilities beyond EVs and into the ESS sector.”
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