POSCO Group has established a significant long-term lithium supply contract with SK On, effective from this year until 2028, with a maximum volume of 25,000 tons. This quantity is sufficient to produce batteries for approximately 400,000 electric vehicles, marking a pivotal step as POSCO gears up to commence commercial lithium production in Argentina in 2024. The supplied lithium will be integrated into SK On's battery projects in Europe and North America, reinforcing both companies' positions in the rapidly expanding EV market.

The lithium sourced from POSCO's production facility in Argentina will undergo the 'PoEM (4M) certification', which ensures compliance with global battery quality and process verification standards. This certification process, planned to begin in the latter half of this year, is crucial for affirming the stability and production capacity of the lithium material used in battery manufacturing. As lithium makes up a significant portion of battery costs—approximately 40% of overall battery raw material costs—this partnership aims to enhance supply stability and thus maintain competitive pricing in the marketplace.

Both companies are also exploring broader cooperative strategies, including potential applications of the lithium produced in Argentina for the energy storage system (ESS) market. Additionally, there are discussions ongoing about recycling used batteries through POSCO's subsidiary, HY Clean Metal, further highlighting the collaboration between POSCO Group and SK On in addressing both supply chain resilience and the broader environmental sustainability goals within the battery production and recycling sectors.