(Yicai Global) Sept. 21 -- GEM, China's largest battery recycler, has joined hands with Australia's Nickel Industries to secure its long-term nickel laterite ore supply in Indonesia.

QMB New Energy Materials, a unit of GEM, and Hengjaya Mineralindo, a subsidiary of the Sydney-based producer of nickel pig iron, established a strategic partnership, according to a statement that the Shenzhen-based firm released yesterday. The pair will decide on pricing in separate agreements each year.

The collaboration guarantees QMB's raw material needs, GEM said, adding that the unit should be able to produce 73,000 tons of nickel and 6,000 tons of cobalt over the next 20 years by using a hydrometallurgical process.

QMB will build a plant to make such battery materials in the Morowali Industrial Park in Central Sulawesi, Indonesia. Nickel Industries, which has a mine about 20 kilometers away from the industrial park, will provide the factory with an annual supply of five million to seven million tons of limonite that has from 1.1 to 1.3 percent of nickel. The total should reach 1.5 million tons.

Nickel Industries' Hengjaya mine in the Southeast Asian country has proven resources of 3.7 million tons of nickel metals and 270,000 tons of cobalt, making it one of the world's top 10 nickel deposits.

GEM, which began its journey as a waste recycler, is transforming into a manufacturer of new energy materials. In the first half, the company boosted its net profit by 27 percent to CNY681 million (USD96.7 million) from a year ago. Revenue jumped by 74 percent to CNY13.9 billion (USD2 billion), and three quarters of the total came from its battery material business.

Editor: Emmi Laine, Xiao Yi