Chilean lithium producer SQM has finalized a long-term agreement with Hyundai and Kia to supply lithium hydroxide, a key component for electric vehicle (EV) batteries. The deal signifies a significant milestone for SQM’s expansion plans in lithium hydroxide production.
While specific details regarding the quantity and financial terms of the agreement have not been disclosed, SQM has expressed that the deal serves as a “strong motivation” for its ongoing expansion efforts in lithium hydroxide production. Hyundai and Kia have opted to secure “a portion” of their future lithium hydroxide supply from SQM.
SQM currently has the capacity to produce approximately 40,000 tons of lithium hydroxide annually, a figure highlighted in the company’s first quarter annual report. The company extracts lithium carbonate from Salar de Atacama and further processes it into lithium hydroxide, which serves as a crucial raw material for battery production.
In line with its expansion strategy, SQM aims to ramp up its domestic production to 100,000 tons by 2025. To achieve this goal, SQM recently entered into a joint venture with state-owned mining company Codelco, aimed at significantly boosting lithium production in the Salar de Atacama. Additionally, SQM is investing in expanding its production capacities in China and Australia.
Aside from Hyundai and Kia, SQM counts Ford, as well as South Korean cell manufacturers LG Energy Solutions (LGES) and SK On, among its customers. The agreement with Hyundai and Kia underscores SQM’s position as a leading supplier of lithium for the rapidly growing EV market.
