SK on sources natural graphite from US-based Anode Materials partner Westwater Resources. SK on has secured U.S.-sourced graphite to further strengthen its response to the Inflation Reduction Act (IRA).
SK on announced on Feb. 12 that it has signed a natural graphite supply agreement with Westwater. Westwater will supply natural graphite from its refinery in Kellinton, Alabama, to SK on's U.S. plants from 2027 through 2031.
It is a conditional off-take agreement, whereby the material under development will be purchased at a pre-negotiated price if it meets certain conditions. Depending on the growth rate of the North American electrification market, up to 340,000 tons can be purchased over the term of the agreement.
The partnership expands on the battery anode materials joint development agreement signed in May of last year. The two companies will apply anode materials made from graphite purified by Westwater to batteries being developed by SK on and improve their performance together. By expanding the collaboration to include the procurement of natural graphite, the raw material for Anode Materials, IRA's response capabilities will be further enhanced.
According to the IRA, starting in 2025, EV subsidies in the U.S. will not be available if the key minerals used in batteries are sourced from a Foreign Entity of Concern (FEOC).
However, in the case of graphite, a key material for anode materials, the global supply chain is almost entirely dependent on Chinese companies that are designated as FEOCs. The battery industry is calling for at least a two-year moratorium on FEOCs for graphite, until the end of 2026, to allow for new technologies and sources.
Anode materials, along with cathode materials, separators and electrolyzers, are the four main components of a lithium-ion battery. It determines the battery's lifespan, charging speed, and more. Graphite is the key raw material, accounting for about 95% of anode materials. Anode Materials is one of the most China-dependent materials. China accounts for about 85% of the global production of anode materials.
SK on signed a memorandum of understanding with Australia's Syrah in 2022 to supply natural graphite and signed a joint development agreement with Urbix in January last year for anode materials. In the case of cathode materials, SK on is strengthening its capability to secure battery materials by signing a series of agreements with Chilean SQM and Australian companies Lake Resources and Global Lithium Resources.
"We will continue to collaborate with leading local raw material companies to actively respond to the IRA," said Park Jong-jin, Vice President of SK on.
"We are very pleased to work with SK on, a global leader in the electric vehicle battery market, and to support them in strengthening their supply chain," said Terence Cryan, Chairman of Westwater.
