Battery manufacturer SK On has signed a lithium hydroxide supply deal with Chile’s SQM.
The terms of the agreement will enable SK On to purchase up to 57,000 tons of lithium hydroxide over the course of five years starting in 2023—enough to produce batteries for approximately 1.2 million EVs.
Obtaining lithium from SQM will help SK On to align its business with the recently passed Inflation Reduction Act (IRA).
The IRA offers a tax credit to consumers when they buy an EV with batteries equipped with a certain percentage of critical minerals extracted or processed in the US or in countries that are free trade agreement (FTA) partners of the US, which includes Chile.
Alongside the deal with SQM, SK On has recently signed agreements with other FTA-eligible partners, such as Lake Resources and Global Lithium Resources from Australia, POSCO Holdings of South Korea, and Switzerland’s Glencore.