SK On signs W1.1tr LFP materials deal with Posco Future M

South Korean battery maker SK On is teaming up with Posco Future M to secure lithium iron phosphate cathode materials, as it builds a supply chain for the US energy storage system market that excludes China.

Under the agreement signed Tuesday, Posco Future M will supply SK On with 1.1 trillion won ($815 million) worth of LFP cathode materials over three years from 2027 to 2029. SK On will use the materials to produce LFP batteries for ESS applications at its Georgia plant, the company said.

The materials will be made with lithium sourced from salt flats in Argentina through Posco Group’s raw-material supply network. Posco Future M will use a new production process aimed at improving quality and cost competitiveness. The company is converting part of its high-nickel cathode material production lines in Pohang to make LFP materials, with mass production scheduled to begin by the end of this year.

The two companies will also discuss extending the supply agreement beyond 2029 based on their long-term partnership.

SK On has been expanding its ESS business in North America. In August, the company signed a contract to supply LFP battery cells to US ESS company NeoVolta Power. It also signed an ESS supply agreement with US renewable energy company Flatiron Energy Development in September 2025.

“We are focusing on building a non-China supply chain and strengthening our core materials competitiveness in response to changes in the global energy market and growing demand for ESS in the US,” said Kim Sung-tan, head of raw materials procurement at SK On.

“We will continue to pursue stable materials procurement and expand our ESS business through strategic partnerships.”