(Yicai Global) Oct. 18 -- GEM’s shares rose after the Chinese battery materials recycler and supplier announced it had secured a long-term supply agreement with lithium battery materials processor XTC New Energy Materials.

GEM’s stock price [SHE:002340] closed up 3.2 percent at CNY11.52 (USD1.79) today. The broader Shenzhen market fell 0.5 percent.

GEM’s wholly-owned subsidiary Jingmen GEM New Materials will provide XTC with 15,000 tons to 35,000 tons of ternary precursor materials and 5,000 tons to 15,000 tons of cobalt oxide products by the end of 2023, the pair said in separate statements late yesterday.

The parties will cooperate in processing the raw materials, which are both essential for lithium-ion battery cathodes, and developing upstream mineral resources, they noted, without disclosing the value of the deal. Jingmen GEM will develop new products according to XTC’s demand.

The cooperation will help GEM build a common value chain with downstream customers to realize its strategic goal of expanding capacity of ternary precursor materials to 200,000 tons by the end of this year and 400,000 by 2025, and that of cobalt oxide products to 35,000 by 2025, it said.

The deal aims to establish a long-term stable strategic partnership with upstream suppliers, exerting business synergies, and ensuring a stable supply chain, XTC said in its statement.

XTC’s shares [SHA:688788] fell 2.8 percent to CNY123.93 (USD19.26).

GEM’s main businesses are nickel-cobalt-lithium resource recycling, battery recycling, and ternary precursor and cobalt oxide production. Its clients include several major battery material processors and battery makers including South Korea's EcoPro and China’s Contemporary Amperex Technology, or CATL.

Established in 2016, XTC mainly produces and sells lithium-ion battery cathode materials. It is a wholly-owned unit of Xiamen Tungsten, the world’s largest tungsten producer. It supplies materials for major domestic and foreign battery producers including Panasonic, Samsung, Amperex Technology, and BYD.

Editor: Futura Costaglione