(Yicai Global) Oct. 22 -- Chinese power battery recycling giant GEM and South Korean lithium cell maker Ecopro have agreed to collaborate on echelon utilization and recycling in Pohang to improve sustainability in the traction battery sector.

The pair penned a deal with the Pohang government yesterday, Shenzhen-based GEM said in a statement the same day. The two firms will set up a company net year and begin investing in and building plants with the local authorities ensuring land supply and providing administrative support.

Echelon utilization is the re-purposing of a vehicle's power battery once its working capacity falls too low -- typically around 80 percent -- such as in the energy storage sector. GEM believes the deal will help it expand into the South Korean battery recycling sector and enhance its position as a core materials supplier to the country's power cell market.

GEM did not disclose how much of the joint venture it would hold, how much the companies would invest in the company, or the scale of the facilities they intend to build.

Ecopro is one of the world's most important producers of anode materials for power batteries and a key supplier to Samsung's storage battery manufacturing unit, Samsung SDI, the statement said.

Editor: James Boynton