As per the terms of the agreement, the EV battery manufacturer will be supplied up to 25,000 tonnes per annum of battery grade lithium from Lake Resource's Kachi project in Argentina
South Korean battery manufacturer SK On has signed a conditional framework agreement (CFA) with Australian lithium developer Lake Resources to acquire a 10% stake in the latter for an undisclosed price.
As per the terms of the agreement, the electric vehicle (EV) battery manufacturer will be supplied up to 25,000 tonnes per annum (tpa) of battery grade lithium from Lake Resource’s Kachi project in Argentina.
The CFA is for an initial period of five years which can be extended for a further five years.
Lake Resources executive chairman Stu Crow said: “The CFA delivers a long-term strategic agreement with SK On, one of the world’s pre-eminent lithium-ion battery producers with a major growing presence in the North American market.”
The delivery of battery-grade lithium to SK On is expected to begin as early as Q4 2024.
As per the CFA, SK On will receive 15,000 tonnes of lithium for the first two years followed by 25,000 tonnes of lithium from the third year. This will allow the Korean company to secure 230,000 tonnes of lithium, which is enough to produce batteries for nearly 4.9 million EVs.
SK On vice president Jinsuk Ryu said: “SK On is very pleased to execute this CFA with Lake, a clean lithium developer, which can allow SK On to secure a stable lithium supplier for its U.S. supply chain.”
“Lake fits particularly well with SK On’s ESG policy as it utilises environment-friendly direct lithium extraction technology for production of lithium. With this CFA, both Parties will strengthen mutual partnership to advance opportunities to secure sustainable sources of raw materials in the future.”
Recently, SK On signed a non-binding memorandum of understanding (MoU) with another Australian lithium explorer Global Lithium Resources to bolster its supply chain of key battery materials.