On March 28, 2019, Tianqi Lithium Kwinana Pty Ltd (“TLK”) signed a Strategic supply agreement with SK Innovation Co., Ltd. (“SKI”) and EcoPro BM Co., Ltd (“Ecopro”). The total amount of lithium hydroxide product sales in a single year as stipulated in the Long-Term Supply Agreements accounts for approximately 20% -25% of the annual production capacity of TLK ’s lithium hydroxide construction projects in the Qanana area, Australia.
In addition, the company also signed a Memorandum of Understanding with SKI to agree on battery supply chain and related technology research and development, which is valid for two years. This signed Memorandum of Understanding is an intentional document.
The announcement shows that SKI has a registered capital of $ 17.5 billion and is South Korea's leading energy and chemical company that has invested heavily in the electric vehicle battery business. SKI currently operates an electric vehicle battery plant in South Korea and has established multiple electric vehicle battery plants in China, Europe and the United States. Ecopro is South Korea's leading and the world's second largest ternary cathode material manufacturer.
TLK has signed Long-Term Supply Agreements with SKI and Ecopro, and will recognize revenue in 2019-2024 and 2019-2023, respectively, according to the performance of the contract, which will have a positive impact on the company's operating performance in the above-mentioned years and will help to enhance the company's sustainability Profitability is conducive to the company's long-term development.
According to the current construction and operation progress of the TLK project, the company is confident to fulfill all the stipulated terms of the contract, which indicates that the company's goal of signing long-term contracts with major international customers in the industry has begun as planned. The signing of the "long-term supply agreement" will have a positive impact on the company's operating performance in 2019-2024 and 2019-2023, respectively.
The company is a leader in the production and supply of battery-grade lithium products. It controls the world's largest lithium reserves with the highest grade and lowest cost. It is also one of the vertically integrated lithium producers. It is downstream of lithium compounds and lithium derivatives. The manufacturing capacity scale and quality control level are in the leading position in the industry. The development strategy that SKI is implementing is in line with the company's development strategy. Both parties have a common firm belief in the long-term growth prospects of the lithium-ion battery and electric vehicle markets. The two sides signed a Memorandum of Understanding. If a long-term cooperative relationship can be established, it will be beneficial to take full advantage of their advantageous positions and competitive advantages in their respective markets, and provide advanced high-nickel rechargeable lithium-ion batteries to downstream new energy vehicle manufacturers, which will be beneficial. Enhancing the company's sustainable profitability is beneficial to the company's long-term development and is in line with the company's long-term strategic planning.