SK Nexilis, the South Korean copper foil producer under SKC, has inked a supply contract worth up to 1.4 trillion won ($1.08 billion) with Swedish battery maker Northvolt, the company said Sunday.

The Korean company’s five-year deal with Europe’s largest secondary battery maker will take effect next year, the announcement read. The supply volume will cover about 80 percent of Northvolt's copper foil demand during the signed period, which would be enough for 1.7 million electric vehicles.

SK Nexilis said it will begin the operation of its 900 billion won Polish copper foil manufacturing facility in the southeastern city of Stalowa Wola next year. The factory will be the company’s largest copper foil plant with a production capacity of 50,000 metric tons per year. Copper foil is one of the key materials of lithium-ion battery anodes for EVs.

According to market tracker SNE Research, the global copper foil market for EV battery is expected to grow to 750,000 tons per year in 2025 with a compound annual growth rate of 40 percent or higher.

“With this mid- to long-term deal, we expect to enhance both companies’ competitiveness in the global EV market,” said an SK Nexilis official.

“We are currently in talks with global top-tier battery customers about additional contracts and plan to announce the outcome soon.”

SK Nexilis plans to complete the construction of a copper foil factory in Malaysia and break ground for two more plants in the US and Canada this year. Building overseas footholds to meet the demands of battery makers in each region, the company has set the target to reach an annual production capacity of 250,000 tons by 2025.