South Korea-based SK On (SKO), a global EV battery manufacturer, signed a Memorandum of Understanding (MOU) with Australia’s Global Lithium Resources to explore future business opportunities together in regard to stable supply of lithium.
SK On ranked ninth in terms of global EV battery market share in 2019, but has shot up to fifth this year. The company, which supplies batteries to automakers including Ford, Hyundai and Volkswagen, currently operates seven factories in the United States, Hungary, China and South Korea and is currently in construction of seven more plants.
Incorporated in 2018, Global Lithium was listed on the Australian Stock Exchange last year. It is developing two flagship lithium assets located in Western Australia to produce lithium from spodumene mineral.
Map of Western Australia showing the location of Global Lithium’s assets.
Under the terms of the MOU, Global Lithium and SKO intend to explore future business opportunities including the potential development of downstream integrated battery grade lithium assets for an initial two-year period. The MOU will also consider:
SK On to potentially support future Global Lithium capital raisings to enable business expansion and development.
Potential investment and offtake opportunities at Global Lithium’s Marble Bar Lithium Project in the Pilbara region and/or the Manna Lithium Project in the Goldfields region.
Potential opportunities for collaboration in electric vehicle (EV) and battery material supply chains.
The term of the MOU is two years unless it is extended or terminated earlier by mutual agreement or superseded by a definitive agreement related to a joint venture, partnership and/or offtake agreement.
Australia is the world’s largest lithium producer according to the USGS and a major producer of other key battery minerals such as nickel and cobalt.
SK On has been steadily reinforcing its supply chain for key battery materials to cope with geopolitical instability and expansion of its global production capacity. In addition to the partnership with Global Lithium Resources, the company is exploring various options to secure the supply of critical battery minerals in countries like Canada, Brazil and Argentina.
In June, SK On signed an MOU with South Korea’s POSCO Holdings to strengthen collaboration across the entire battery value chain, ranging from secondary battery raw materials to recycling. In 2019, SK On signed a supply agreement with Switzerland-based Glencore, the world’s largest supplier of cobalt, to secure cobalt for six years from 2020 to 2025.