SK On said Wednesday that it signed a memorandum of understanding with US oil and gas company ExxonMobil to secure lithium supply.

The agreement was finalized Monday at the Fastmarkets Conference, the world's largest conference for lithium and battery raw materials, in Las Vegas.

SK On is to receive up to 100,000 tons of lithium produced by ExxonMobil using Direct Lithium Extraction technology from a lithium brine in Arkansas.

Under the objective to supply lithium for 1 million electric vehicles per year by 2030, ExxonMobil seeks expansion into the battery materials market.

Last year, the company got mining rights for lithium brine resources in Arkansas and commenced extraction in November. This brine is estimated to contain 4 million tons of lithium carbonate equivalent, sufficient to produce batteries for 50 million electric vehicles.

DLE technology directly extracts lithium from the brine using methods like adsorption. This method is higher in productivity and lower in water consumption compared to the existing method of evaporating brine to obtain lithium.

SK On is currently working to build a global supply chain for key minerals to adapt to rapid change in global industrial policies such as the Inflation Reduction Act and the EU's Critical Raw Materials Act.

In February, the company signed a contract with US mining company Westwater Resources for the supply of natural graphite. In November 2022, it made a contract with Chilean lithium producer SQM for lithium supply.

"We will continue to secure key minerals that meet IRA requirements to ensure the benefits for customers in the North American market," said Park Jong-jin, vice president of strategic purchasing at SK On.