(Yicai Global) Feb. 28 -- GEM’s shares gained after China's biggest battery recycler said it had inked a deal with automaker Mercedes-Benz China and global battery giant Contemporary Amperex Technology to build a closed-loop recycling project for end-of-life power batteries.

GEM [SHE: 002340] closed 2.2 percent higher at CNY7.89 (USD1.14) a share in Shenzhen today, after earlier climbing by as much as 3.1 percent. 

Under the deal, GEM will receive end-of-life batteries from Mercedes-Benz China and remove their key materials, including nickel, cobalt, manganese, and lithium, which will then go to CATL for use in new batteries for the carmaker, the firm said yesterday.

The new partnership will also include an extensive in-depth exploration of battery recycling technology and business model, GEM added. If the project goes well, it should positively impact the company’s business development, it added.

Shenzhen-based GEM also has similar recycling tie-ups with others, including one with major Chinese battery maker EVE Energy.

In recent years, GEM has expanded its battery recycling capacity. It processed more than 12,000 tons of power batteries, equal to about 1.5 gigawatt-hours, in the first three quarters of last year, representing a 130 percent leap from the same period a year earlier, the company’s earnings report showed.

GEM’s net profit likely soared 30 percent to 60 percent to between CNY1.2 billion (USD172.8 million) and CNY1.5 billion last year, it said on Jan. 19.

Editor: Martin Kadiev