SEOUL -- SK On, the battery-making unit of South Korea's third-largest conglomerate SK Group, has partnered with Westwater Resources, a United States-based graphite producer, to secure natural graphite, one of essential materials for electric vehicle batteries. The two sides' partnership is in response to the U.S. government's Inflation Reduction Act.
The inflation reduction act (IRA), which was signed into law by President Joe Biden in August 2022, offers tax credits to EVs assembled in North America, and contains more than a certain percentage of core minerals extracted in the region and countries that signed Free Trade Agreements (FTAs) with the U.S.
Starting in 2025, subsidies will not be provided if core minerals are sourced from Foreign Entities of Concern (FEOC), which include overseas organizations that are owned, controlled, or under the authority or influence of governments categorized as "countries of concern," such as China.
Cathodes are one of the major components of lithium-ion batteries, which determine the lifespan and charging speed of batteries. Currently, China accounts for around 85 percent of global cathode production. According to data released by the Korea International Trade Association (KITA), South Korea's imports of natural graphite were estimated at $130 million in 2022. About 93.3 percent of the graphite imports came from China.
SK ON said on February 12 that Westwater will supply natural graphite produced at its plant in Alabama between 2027 and 2031. The South Korean battery maker can purchase up to 34,000 tons during the contract period. The American company is currently building a graphite refining facility in east-central Alabama with an annual production capacity of 7,500 tons. Westwater also holds exploration and mining rights for graphite from a 170 million square meter-wide area in Coosa County, Alabama.
"We will continue seeking partnerships with promising battery material companies in the region," SK ON's vice president Park Jong-jin said in a statement. "We are excited to partner with a leading global manufacturer of EV batteries and assist SK On to further establish its U.S.-based supply chain," said Terence Cryan, the executive chairman of Westwater.
© Aju Business Daily & www.ajunews.com Copyright: All materials on this site may not be reproduced, distributed, transmitted, displayed, published or broadcast without the authorization from the Aju News Corporation.