By Kate Yuan

(JW Insights) Mar 27 -- Green Eco-Manufacture (GEM 格林美), China’s leading battery and material recycler, signed an MoU with South Korea's SK On and EcoPro to establish a precursor manufacturing plant in South Korea, GEM announced on March 24.

The three companies will invest 1.21 trillion won ($929.33 million) during 2023-2026 in the joint venture with a scheduled annual output of 43,000 tons. Local government and institutions in Saemangeum, where the facility will be located, will provide administrative, financial, taxation, land, energy, and environmental emission support.

This move is to meet the conditions of the U.S.Inflation Reduction Act (IRA) on the entry of battery materials into the US market and to deal with the restrictions on critical raw materials for batteries imposed by the EU’s CRMA, the Shenzhen-based company said.

GEM hopes to stabilize its core South Korean market, sell into the U.S. and European markets, as well as to achieve its vision of 500,000 tonnes of precursor sales by 2026.

Setting up a joint venture in South Korea, a U.S. ally, would allow GEM to move capacity out of China and prepare the country for a greener economy.

GEM will hold 49% or less of the joint venture with SK On and EcoPro each owning 25.5% or more.

Founded in 2001, GEM has established waste recycling and new energy material parks in many provinces including Hubei, Hunan, Guangdong, Jiangxi, Henan, Tianjin, Jiangsu, and Zhejiang as well as successful presence in South Africa, South Korea, and Indonesia, according to its official website. It went public on Shenzhen Stock Exchange in January 2010.