SK Nexilis signs $1 billion deal to supply copper foil to Northvolt

SK Nexilis Co., a unit of South Korean chemical materials maker SKC Ltd., said on Sunday it has signed a 1.4 trillion won ($1.08 billion) deal to supply copper foil to Northvolt AB, Europe’s largest electric vehicle battery maker.

Under the contract, SK will supply the core EV battery material to the Swedish company over five years from 2024.

The supply volume will cover about 80% of Northvolt's copper foil needs over five years – enough for 1.7 million electric cars, the Korean company said.

A copper foil is a thin foil that surrounds the anode, the negative end of a lithium-ion battery. High-strength copper foils are essential to making safer, high-density rechargeable batteries.

The Swedish lithium-ion battery producer that counts BMW and Volkswagen among its investors is currently building a 150 GWh battery plant in Poland with more than 1 trillion won in investment from European carmakers.

The companies said that the deal with SK will ensure Northvolt a stable supply of copper foil. 

SK TO EXPAND CAPACITY IN POLAND, OTHER COUNTRIES

For the supply, SK said it will begin operations of its plant in Stalowa Wola, Poland with an annual production capacity of 50,000 tons next year.

Already the world’s largest copper foil maker, SK plans to further expand its production capacity worldwide.

It expects to complete the construction of a copper foil factory in Malaysia and break ground on two more plants in North America by the end of this year.

Through the expansion, the company aims to secure an annual production capacity of 250,000 tons globally by 2025.

“We’re in talks with multiple clients for supply contracts. Another deal is coming soon,” said an SK Nexilis official.

SK is supplying copper foil to a number of global battery makers, including Korean companies such as SK On Co. and LG Energy Solution Ltd.

According to market tracker SNE Research, the global copper foil market for EV batteries is forecast to grow at an annual average rate of 40% from 270,000 tons in 2021 to 750,000 tons by 2025.

Write to Jae-Fu Kim at hu@hankyung.com

In-Soo Nam edited this article.