SK On to develop anode materials with Westwater Resources of US

South Korea's electric vehicle (EV) battery maker SK On and the American graphite company Westwater Resources will jointly develop anode materials for high-performance batteries to boost supply chains in the US amid the Inflation Reduction Act (IRA) there.

SK On on Wednesday said it signed an agreement with Westwater to study and develop over the next three years eco-friendly and high-performance anode materials specialized for SK On batteries.

A Nasdaq-listed company, Westwater owns the rights to explore and mine the Coosa Graphite Deposit in Alabama. Graphite is a raw material for anode materials, one of the four core components of an EV battery.

The Centennial, Colorado-based company is also building a graphite processing plant with annual capacity of 75 million tons near the deposit. Production will begin in the first half of next year.

Depending on the results of its collaboration, SK On will also consider using Westwater's cathode materials at SK On's battery plants in the US.

"We will actively respond to the IRA by strengthening our supply chain in the US," said Sun Hee-young, SK On vice president in charge of advanced research. "For this, we will steadily promote collaboration with leading raw material companies in the US."

SK On is striving to diversify its China-dependent supply chains for anode materials. In January, it signed an agreement with Urbix, an American company that is building in Arizona an anode material production line with annual capacity of about 1,000 tons, to jointly develop such materials.

Urbix plans to boost capacity to 28,500 tons per year by 2025. SK On, which has a cooperative relationship with the latter, can also benefit from the effect of stable supply.

Westwater Resources Chairman Terence Cryan said he greatly looks forward to working with a leading global battery maker, adding that the agreement is an option to secure natural graphite for batteries in the US that could greatly help SK On later on.

Write to Nan-Sae Bin at binthere@hankyung.com