(Yicai) April 11 -- GEM, the largest supplier of battery raw materials in China and the country's leading battery recycler, said it has linked arms with South Korean peer and client EcoPro BM and Indonesian miners to build the world's most cost-competitive lithium battery materials supply chain in the Southeast Asian country.

GEM and EcoPro plan to construct the International Green Industrial Park in Morowali Regency, a significant nickel mining area in central Sulawesi province, the Shenzhen-based firm announced late yesterday, citing a deal the pair inked on April 9. The move will enhance the supply capability of related products and address international trade risks, it added.

The park aims to set up a complete supply chain for ternary lithium battery materials, including initial processing of nickel ore and production of lithium battery precursors and cathode materials, GEM, which has upstream nickel ore and midstream lithium battery material processing assets in Indonesia, noted.

GEM will provide upstream nickel processing technology and ternary lithium battery precursor material production technology for the park, while EcoPro will supply cathode material production technology and be responsible for attracting global investors, including from South Korea, as well as global battery customers, the Chinese firm said.

The Indonesian partners will be responsible for providing nickel ore supply and assisting the project in obtaining the necessary permits, Gem added.

GEM and EcoPro will establish a joint venture project company, with the latter expected to own no more than 20 percent, GEM said, adding that the plan includes attracting local partners, such as upstream nickel resource collaborator PT Vale, before downstream battery suppliers.

The deal also includes proposed cooperation projects, such as EcoPro's investment in the nickel processing project announced by GEM and PT Vale last November, the Chinese firm noted, without disclosing the investment amount. In addition, it reiterated the pair's decision to build a JV plant for lithium battery cathode materials in Indonesia, announced in January.

Shares of GEM [SHE: 002340] closed unchanged at CNY6.02 (82 US cents) in Shenzhen today. The stock price has dropped to near its lowest since last September due to the impact of the new Trump tariffs.

Editor: Martin Kadiev