SK On will acquire 10% of the capital of Lake Resources

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This photo shows workers at the Kachi Lithium Brine project in northern Argentina. (Lake Resources)

South Korean lithium-ion battery maker SK On has signed a conditional framework agreement to buy a 10% stake in Australian lithium developer Lake Resources in its new rights offering, a filing said Wednesday.

SK On will buy the stake in June 2023 on the condition that the extraction of high-purity lithium from saltwater at Lake Resources’ flagship projects, including the Kachi project in Argentina, yields a “positive result”, according to the file filed with financial supervision. Service.

The evaluation will be based on a set of SK On criteria, such as lithium quality, productivity and supply cost, an SK On spokesperson said.

The exact amount of stake that SK On will acquire has not yet been determined.

The strategic investment in the Australian Securities Exchange-listed company will give SK On offtake rights to secure up to 230,000 metric tonnes of clean lithium in 10 years from the fourth quarter of 2024, according to the release. This will be enough to produce batteries for around 4.9 million electric vehicles.

The supply agreement has an initial term of five years to obtain a combined 105,000 tons of lithium and the agreement can be extended for another five years to obtain 25,000 tons of lithium per year.

This is part of SK On’s desire to stabilize the supply of critical materials for electric vehicle batteries in the medium and long term. SK On operates battery production facilities in the United States, China, Hungary and Korea.

By Son Ji-hyoung ([email protected])

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