(Yicai Global) March 29 -- Chinese metals recycler GEM has sold a 9 percent stake in its Indonesian nickel processing joint venture project to EcoPro BM, the leading supplier of cathode materials for ternary lithium batteries in South Korea.

GEM will pocket USD26.95 million plus interest from selling the stake in PT. Qing Mei Bang New Energy Materials Indonesia QMB, the Shenzhen-based company said in a statement late yesterday, the day the deal was signed.

GEM’s stake in the JV, co-owned with Chinese nickel giant Tsingshan Holding Group and a firm under top battery maker Contemporary Amperex Technology, will fall to 63 percent after the transaction, it added.

The two sides also agreed that EcoPro will provide a USD31.37 million interest-free loan and another worth USD31.5 million in phases to support the project, GEM said.

EcoPro is a core supplier of high-nickel cathode materials to major global power battery producers, including Samsung SDI and SK Innovation, and has been a long-term client of GEM since last April.

Shares of GEM [SHE: 002340] closed 0.8 percent lower today at CNY8.40 (USD1.32), after opening up 1.4 percent in the morning.

The JV is responsible for investing in the construction of nickel, cobalt and manganese compound production bases in the Chinese-Indonesian Integrated Industrial Park in Central Sulawesi. Its planned annual capacity of battery-grade nickel sulfate is 150,000 tons, according to a statement GEM put out in 2019.

But there has been no update on progress since then, and according to the data provided by GEM yesterday, revenue at the Indonesian project company between January and September last year was still zero.

According to GEM’s deal with EcoPro, GEM will supply a total of 700,000 tons of high-nickel ternary precursor materials to the Korean firm from 2023 to 2026.

Editor: Peter Thomas