(Yicai) Sept. 9 -- GEM, one of China’s biggest supplier of battery raw materials, is teaming up with South Korean producer of battery cathode materials EcoPro to set up a complete industrial chain in Indonesia and form a strategic alliance that will give them a competitive edge in the global lithium battery materials market.

GEM is building a business alliance with EcoPro that will cover all links in the industrial chain including nickel ore smelting as well as battery precursor and cathode materials manufacturing in Indonesia, the Shenzhen-based firm said yesterday. They have agreed to pen a co-operation deal before the end of the year.

The tie-up will give full play to the two companies’ respective strengths and enhance the competitiveness of their battery materials in the global market, protecting the core interests of both parties, it added.

GEM owns nickel ore processing plants in Indonesia. In March 2022 it said it would transfer a 9 percent stake in one of its joint venture factories in the Southeast Asian country to EcoPro. In March last year, GEM also said it will build a factory that makes lithium battery cathode precursor materials in South Korea with a subsidiary of EcoPro, battery precursor maker Ecopro Materials, and South Korean battery manufacturer SK On.

GEM is also a long-time supplier to Cheongju-based EcoPro. In October 2021, GEM agreed to supply no less than 650,000 tons of high-nickel ternary precursor materials to EcoPro BM, the battery cathode material unit of EcoPro, from 2024 to 2026. And in August, the two sides signed an additional order of 265,000 tons which will run from 2025 to 2028 to meet rising demand.

GEM plans to link arms with EcoPro BM to form a battery materials manufacturing network with bases in Indonesia and South Korea that meet EU and US standards and regulatory requirements, GEM said in August.

GEM’s share price [SHE:002340] closed down 0.7 percent at CNY5.67 (USD0.80) today.

Editor: Kim Taylor