[Edaily Reporter JAEMIN SONG ] SK On will procure 160 billion won worth of lithium iron phosphate (LFP) cathode materials from L&F. The company plans to accelerate its expansion into the energy storage system (ESS) markets in South Korea and the United States by securing a stable supply of domestically produced core materials.

SK On announced on the 17th that it signed a supply contract for LFP cathode materials with L&F at the Gwanhoon Campus in Jongno-gu, Seoul. The signing ceremony was attended by Kim Seong-tan, Head of Raw Materials Procurement at SK On, and Lee Byung-hee, Chief Operating Officer (COO) of L&F, among others.

Under the contract, SK On will receive approximately 160 billion won worth of LFP cathode materials from L&F over a three-year period from 2026 to 2028. The two companies may also discuss extending the contract for up to three additional years beyond 2028, taking into account market conditions, supply performance, and customer demand.

LF cathode material is a key battery material made primarily from lithium, phosphate, and iron. Although it has a lower energy density than nickel-cobalt-manganese (NCM) batteries, its price competitiveness, safety, and long lifespan are driving increasing demand, particularly for energy storage system (ESS) batteries.

SK On plans to use the cathode material secured through this agreement in its LFP battery cell production lines for ESS at its Seo San Co. Ltd. plant in South Chungcheong Province and its plant in Georgia, U.S. The company aims to build a supply chain that reduces reliance on Chinese materials to address U.S. supply chain regulations and enhance its competitiveness in securing local ESS orders.

SK On is converting its existing electric vehicle (EV) battery production lines to ESS use to meet growing demand. At the Seo San Co. Ltd. plant, 3 GWh of the total annual production capacity of 7 GWh will be converted to LFP battery production lines for ESS, with deliveries scheduled to begin in the first half of next year. The plant in Georgia, U.S., will also convert some of its lines to dedicated LFP production lines for ESS.

Earlier, in February of this year, SK On secured 284 megawatts (MW)—more than half of the total 565 MW—in the second round of the domestic ESS central contract market bidding. Last month, the company expanded its business into overseas markets by signing a supply contract for LFP battery cells with U.S. ESS firm Neovolta Power.

L&F completed construction of a dedicated LFP cathode material plant in the Dalseong-gun National Industrial Complex in Daegu last May and shipped trial production units from South Korea’s first LFP cathode material mass production line at the end of July. The company plans to supply SK On with third-generation high-density LFP cathode material, which has a higher energy density than standard products.

Kim Seong-tan, Head of Raw Materials Procurement at SK On, stated, “As the decoupling of supply chains from China gains momentum in the ESS battery market, we have proactively secured domestically produced LFP cathode materials through this medium- to long-term contract,” adding, “This agreement will further strengthen our competitive edge in LFP battery materials.”