SK On Secures KRW 1.1 Trillion Worth of LFP Cathode Materials from POSCO Future M: "To Be Used in ESS Line in Georgia, U.S."

[Financial News] SK On has shifted its procurement of lithium iron phosphate (LFP) cathode materials to a domestic supplier in response to the expanding U.S. energy storage system (ESS) market. As part of efforts to restructure its supply chain and reduce dependence on Chinese products, the materials will be used to produce ESS batteries at the company's plant in Georgia, U.S.
SK On announced on the 22nd that it had signed a supply agreement for LFP cathode materials with POSCO Future M. Under the agreement, SK On will receive approximately KRW 1.1 trillion worth of LFP cathode materials from POSCO Future M over three years, from 2027 to 2029. The materials will be used to manufacture LFP battery cells for ESS applications at SK On's plant in Georgia, U.S. Building on their mid- to long-term partnership, the two companies also plan to discuss extending the supply period beyond 2029.
The cathode materials procured by SK On will be produced by processing lithium from salt lakes in Argentina through a new method under POSCO Group's raw-material supply cooperation system. The product is designed to improve both cost competitiveness and quality. To produce it, POSCO Future M converted part of a high-nickel cathode material line at its Pohang plant for LFP production. Mass production is scheduled to begin at the end of this year, with supplies to SK On's Georgia plant set to start in 2027. SK On expects the agreement to establish a non-China LFP cathode material supply chain and further strengthen its competitiveness in sourcing key materials for the U.S. ESS market.
SK On is also accelerating the expansion of its North American ESS business. In August, it signed an agreement to supply LFP battery cells to U.S. ESS company NeoVolta Power. In September last year, it also signed an ESS supply agreement with U.S. renewable energy company Flatiron Energy Development.
Kim Seong-tan, head of SK On's raw materials procurement office, said, "As the global energy market changes and demand for ESS in the United States expands, SK On is focusing on building a supply chain independent of China and strengthening its competitiveness in key materials. Going forward, we will continue to pursue stable materials procurement and market expansion in the ESS market through differentiated purchasing capabilities and strategic partnerships with outstanding companies."
[email protected] Kim Dong-chan Reporter