Partnership Formed Between SK On and US Graphite Company to Prepare for Inflation Reduction Act

SK On Partners with Westwater Resources for EV Battery Materials

SK On Partners with Westwater Resources for EV Battery Materials

Courtesy of SK On
[Courtesy of SK On]

Partnering for EV Battery Materials

SK On, the battery-making unit of South Korea’s SK Group, has entered into a partnership with Westwater Resources, a United States-based graphite producer. The aim of this collaboration is to ensure a stable supply of natural graphite, a crucial component for electric vehicle (EV) batteries.

Inflation Reduction Act and EV tax credits

In August 2022, President Joe Biden signed the Inflation Reduction Act (IRA) into law. Under this act, tax credits are offered to EVs assembled in North America, provided they contain a certain percentage of core minerals extracted in the region or countries that have signed Free Trade Agreements (FTAs) with the U.S.

Restrictions on Core Minerals Sourcing

Starting in 2025, subsidies will not be provided for EVs if core minerals are sourced from Foreign Entities of Concern (FEOC). These entities include overseas organizations that are owned, controlled, or influenced by governments categorized as “countries of concern,” such as China.

The Dominance of China in Cathode Production

Cathodes are vital components of lithium-ion batteries, as they determine the lifespan and charging speed of batteries. Currently, China accounts for approximately 85% of global cathode production. In 2022, South Korea imported around $130 million worth of natural graphite, with 93.3% of the imports coming from China, according to data from the Korea International Trade Association (KITA).

Securing Natural Graphite Supply

On February 12, SK ON announced that Westwater will supply natural graphite produced at its plant in Alabama between 2027 and 2031. SK ON has the option to purchase up to 34,000 tons of natural graphite during this contract period. Westwater is currently constructing the “Kellyton Graphite Plant,” a graphite refining facility in east-central Alabama with an annual production capacity of 7,500 tons. Furthermore, Westwater holds exploration and mining rights for graphite from a 170 million square meter-wide area in Coosa County, Alabama.

Positive Outlook and Additional Financing

Terence Cryan, the executive chairman of Westwater, expressed excitement about the partnership with SK ON and the opportunity to aid in the establishment of a U.S.-based supply chain for EV batteries. Cryan also stated that this agreement is a crucial step towards securing additional financing for the completion of Phase I of the Kellyton Graphite Plant.

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Read More of this Story at – 2024-02-12 09:35:51

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