(Yicai Global) Chinese metals recycler GEM has penned a deal to sell at least 100,000 tons of materials for lithium power batteries to South Korea's Ecopro over the next seven years.

The materials include high-nickel ternary precursor materials, Shenzhen-based GEM said in a statement yesterday. The actual amount sold will depend on individual contracts signed each year and prices will be based on open market rates like the London Metal Exchange. The pair will decide on prices for the upcoming six months every June and December.

Shares in GEM [SHE:002340] were down 10 percent at CNY5.19 (74 US cents) when the market closed for lunch, though it was widely expected that Chinese stocks would plummet today, the first trading day after an extended Chinese New Year holiday due to the international outbreak of the novel coronavirus originating in Wuhan.

Ternary precursor materials are integral to high-capacity lithium batteries based on nickel, and Ecopro is one of the world's chief suppliers of nick for lithium power batteries. GEM is one of the world's top providers of precursors and it provides materials to the likes of Samsung, LG Chem, and Contemporary Amperex Technology.

Editor: James Boynton