(Yicai) Aug. 19 -- GEM, the largest supplier of battery raw materials in China and the country's leading battery recycler, has secured a new order for ternary lithium battery precursor materials from South Korea's EcoPro BM.

EcoPro BM will buy an additional 265,000 tons of lithium battery precursor materials from GEM over the next four years to meet growing demand from US and European customers, the Shenzhen-based firm announced late on Aug. 16.

GEM will supply EcoPro BM with products at market-competitive prices, it noted, without disclosing expected revenue. Ternary lithium battery precursor materials are the raw ingredients for producing cathode materials for ternary lithium batteries.

In October 2021, GEM also inked a non-binding agreement with EcoPro BM to supply the Cheongju-based firm with no less than 650,000 tons of high-nickel ternary precursor materials between this year and 2026. 

According to GEM, which has nickel processing plants in Indonesia, the new deal also includes a memorandum of understanding for a deeper integration of the pair's raw materials and customer resources as well as technical, manufacturing, and capital capabilities. 

The goal is to supply US and European clients with battery materials made by GEM and EcoPro BM respectively or joint venture plants in Indonesia and South Korea, which meet the regulatory requirements of the two markets.

GEM transferred a 9 percent stake in its Indonesian JV nickel resources processing plant to EcoPro BM's parent company EcoPro Materials in March 2022.

GEM and EcoPro BM will strive to achieve a closer business relationship, eventually making the Chinese company the second-largest battery precursor supplier for South Korean customers, only behind EcoPro Materials, GEM noted, citing the MOU.

The tie-up aims to build a globally competitive supply chain for ternary lithium battery raw materials consisting of "nickel resources-precursors-cathode materials," it added.

Shares of GEM [SHE: 002340] gained 1 percent to close at CNY5.83 (82 US cents) each in Shenzhen today, after jumping by as much as 2.8 percent in the morning trading session.

To meet the requirements of the US Inflation Reduction Act, GEM signed a non-binding agreement with South Korean battery maker SK On and EcoPro Materials in March last year. The three plan to invest up to USD931 million to build a plant in South Korea to produce lithium battery cathode precursor and associated raw materials, mainly for the United States and Europe.

EcoPro BM, SK On, and US auto giant Ford Motor agreed to jointly invest CAD1.2 billion (USD878,270 million) to build a lithium battery cathode materials JV factory in Quebec, the three companies announced in August last year.

Editor: Martin Kadiev