SK Enmove, SQM ink supply deal for refrigerant material iodine

SK Enmove Co. a lubricant producing arm of SK Innovation Co., said on Thursday that it has signed a preliminary agreement to buy iodine from Sociedad Química y Minera de Chile (SQM), the world’s largest iodine miner, to produce advanced car air conditioner refrigerants.

Iodine is a key material for refrigerants used for heating ventilation and air conditioning (HVAC) systems. It boosts the energy efficiency of refrigerants that absorb or release heat.

Details about the supply volume and timeframe will be finalized after the two companies ink a definitive agreement.

The tentative supply deal came after SK Enmove in January agreed with Hyundai Motor Group to develop advanced air conditioner refrigerants for automobiles.

Its next-generation refrigerant was proved to reduce power consumption, while boasting the comparable performance to existing refrigerants in a verification test conducted with a simulated HVAC equipment used for Hyundai Motor Co.'s electric vehicles, said SK Enmove.

In June, the product was certified by the American Society of Heating, Refrigerating and Air Conditioning Engineers, an organization that develops and publishes standards for HVAC systems.

“Through collaboration with SQM, which has proven excellent quality and production capacity, we have laid the foundation for the stable production and supply of next-generation automotive refrigerants,” SK Enmove CEO Kim Won-kee said in a statement.

“Going forward, we will join hands with various global companies to build solid value chain and move forward as a leading refrigerant and energy-saving company,” he added.

SQM is forecast to sell 14,000 tons of iodine this year, accounting for 35% of the global supply.

The Chilean miner has been supplying the mineral on a steady basis for more than 20 years and its efforts to reduce its carbon footprint will make it an ideal supply partner, SK Enmove added.

SK Group has been expanding partnership with SQM, also the world’s No. 2 lithium mining company, to strengthen its supply chain.

In 2022, SK On Co., an EV battery maker, signed an agreement to secure lithium hydroxide, a key battery material, from SQM for five years from 2023.

In June this year, Hyundai and Kia Corp. under Hyundai Motor Group entered into a long-term supply agreement with SQM for lithium hydroxide.

Write to Hyung-Kyu Kim at khk@hankyung.com
 

Yeonhee Kim edited this article