It could be corrosion, but none of the nearby contacts are affected. If the battery got splashed, odds are the other contacts may have also gotten some. But they all look ok. Given how extreme it is, I'd consider arcing, which could involve bad grounding or shorting somewhere. It's hard to see if the plastic around it has been damaged or not. If yes, then it's definitely some sort of spark.
Replacing the contact should be fairly easy if you can get the part. But you might want to go upstream and check the individual cells and contacts. Many of these batteries are clusters of 18650 cells. Easy to swap out. If there is any sign of damage to the internal battery contacts, then you might want to replace the contacts AND the cells.
Simple soldering ($20 soldering pen and material) and a wire brush. $30 multimeter to check for continuity and voltage/current levels.