South Korean battery maker SK On has entered into a three-year agreement with Posco Pilbara Lithium Solution to procure up to 15,000 tonnes of lithium hydroxide for use in NCM cathodes. The deal underscores SK On’s efforts to diversify its raw material sources while reducing logistics costs and lead times.
The lithium hydroxide will be processed in South Korea, though the raw material originates from Pilbara Minerals’ Pilgangoora mine in Western Australia, which has an annual capacity of approximately 680,000 tonnes. Posco Pilbara Lithium Solution, a joint venture formed in 2021 between Posco and Pilbara Minerals, handles the final conversion of lithium spodumene into battery-grade lithium hydroxide at its Gwangyang facility in South Korea. Posco, an early investor in Pilbara Minerals, has held a stake in the mining company since 2018 and secured a 20-year lithium supply agreement.
Previously, SK On sourced much of its lithium hydroxide for domestic operations from China and Chile, with a supply agreement signed with SQM in 2022. The company is also set to receive lithium from ExxonMobil’s U.S.-based production starting in 2027. This new partnership with Posco Pilbara Lithium Solution aligns with SK On’s strategy to strengthen procurement capabilities and adapt to evolving market demands.
“This collaboration marks an important step in enhancing SK On’s procurement competitiveness,” said Park Jong-jin, Head of SK On’s Strategic Procurement Office. Posco Pilbara Lithium Solution CEO Lee Kyung-sub added, “This agreement highlights the global competitiveness of Posco Group’s lithium business and supports South Korea’s position in the eco-friendly materials market.”
