SK on joins hands with ExxonMobil to expand lithium supply chain

[Courtesy of SK on Co.]

SK on Co., a pure-play battery maker under South Korea’s SK Group, has partnered with ExxonMobil Corp., the largest oil company in the United States, to expand its U.S. lithium supply chain.

SK on announced on Wednesday that it signed a memorandum of understanding (MoU) with ExxonMobil for lithium supply at the Fastmarkets Conference, the world‘s largest lithium supply and battery raw materials conference, held in Las Vegas, the U.S., on Monday (local time).

Under the MoU, SK on will be able to receive up to 100,000 tons of lithium produced by ExxonMobil using direct lithium extraction (DLE) technology at its lithium brine lake in Arkansas.

Details on timing and quantity of the supply will be confirmed after the final contract is signed.

ExxonMobil acquired the Arkansas brine lake at the beginning of last year to enter the battery core materials business and started lithium extraction in November of the same year.

It is estimated that the brine lake contains 4 million tons of lithium carbonate equivalent (LCE), enough to produce batteries for 50 million electric vehicles.

ExxonMobil aims to supply lithium sufficient for 1 million EVs per year starting in 2030.

DLE technology involves directly extracting lithium from brine through adsorption and other methods. This process is more environmentally friendly compared to hard rock mining, as it produces less carbon emissions.

While the initial capital investment is significant, DLE offers higher productivity and lower water usage compared to traditional methods of evaporating brine to obtain lithium.

SK on has been striving to establish a global supply chain for key minerals amid the rapidly changing industry environment, such as the U.S. Inflation Reduction Act (IRA) and the European Union’s Critical Raw Materials Act (CRMA).

Under the IRA, consumers who purchase qualifying EVs assembled in North America are eligible for a tax credit of up to $7,500.

SK on signed a natural graphite supply agreement with Westwater Resources Inc. in the U.S. in February and a lithium supply agreement with Sociedad Quimica y Minera de Chile SA (SQM), a Chilean mining company, in November 2022.

In December 2019, the company also entered into a cobalt purchase agreement with Switzerland‘s Glencore plc.

“We will continue to strive to secure key minerals that meet the requirements of the IRA to ensure the benefits for consumers in our core market, North America,” said Park Jong-jin, executive vice president of strategic procurement at SK on.