SK On has secured in South Korea a key-material supply chain for LFP batteries, which use lithium, phosphate and iron as raw materials. SK On said on Sept. 17 it signed an LFP cathode material supply contract with L&F at its Gwanhun Campus in Jongno district, Seoul. The contract runs from that day through Dec. 31, 2028, and is worth about 160 billion won. Attendees at the signing included Kim Seong-tan (김성탄), head of raw material procurement at SK On, and Lee Byeong-hee (이병희), chief operating officer at L&F.

The move is significant as a proactive partnership amid intensifying competition in the global battery supply chain to secure non-Chinese materials. The cathode materials secured will be used in LFP cell production lines for energy storage systems at SK On’s Seosan plant in South Chungcheong province and its plant in the U.S. state of Georgia.

The Seosan plant aims to deliver in the first half of next year after converting 3 GWh of its total 7 GWh production capacity to an ESS line. Work is also under way at the Georgia plant to convert some lines exclusively for ESS. SK On has previously confirmed its market dominance by winning 284 MW out of a total 565 MW in a tender for South Korea’s second ESS central contract market in February this year. In August, it also signed an LFP cell supply contract with U.S. ESS company NeoVolta Power, expanding its business scope.

For L&F, the contract is a new order about two months after a supply deal signed in July with a U.S. battery technology company. Supply will be handled by L&F Plus, an LFP-focused subsidiary established in August last year. An LFP cathode material-only plant built in the National Industrial Complex in Dalseong county, Daegu, with an investment of 338 billion won, was completed in May, and on July 31 it shipped pilot-produced items from a mass production line for the first time in South Korea.

The product supplied to SK On is a high-density, third-generation LFP cathode material with higher energy density than general LFP cathode materials. The company said it addresses the low energy-density limitation of existing LFP materials by achieving a compaction density of at least 2.50 g/cc. L&F Plus plans to secure production capacity of up to 60,000 tons by the first half of 2027 and is also considering additional expansion in line with rising demand.

The two companies agreed to discuss extending the contract for up to 3 years after 2028, considering the market environment, supply performance and customer demand. If the extension is agreed, the two companies will shift to a mid- to long-term partnership relationship.

Kim said, "As de-Sinicisation of supply chains accelerates in the global ESS battery market, we proactively secured high-quality domestically produced LFP cathode materials through a mid- to long-term supply contract." He said, "This contract will further strengthen SK On’s competitiveness in LFP battery materials."

Lee said, "This contract is the result of recognition of L&F’s competitiveness in LFP products, customer responsiveness and early mass production capabilities." He said, "Going forward, we will continue expanding customer acquisition in the ESS and entry-level EV markets based on stable mass production capabilities and differentiated product competitiveness, and we will move forward to become a key materials company that leads the global non-Chinese LFP supply chain."