Chinese recycler GEM signs cooperation agreement with Hungary

The Chinese cathode producer and recycling pioneer, GEM, has signed an agreement with Hungary to cooperate to establish a plant for the production of high nickel precursors and recycling of end-of-life batteries in Hungary.

GEM, one of the world's largest battery recyclers and today also one of the leading precursor and cathode producers in the world, has for some time been transparent about their plans to establish operations in Europe and North America.

The agreement follows the decision of GEMs' partner, Ecopro, to establish a cathode plant in Debrecen, Hungary, with an annual capacity of 108,000 tonnes through its subsidiary Ecopro BM.

GEM and Ecopro, which supplies cathode material to all three South Korean battery makers, has been working together for several years and are involved in a number of joint projects. GEM delivered technology to Ecopro's recently commissioned recycling plant in Pohang, South Korea where production scrap from LG Energy Solutions Poland plant is processed. The companies has a precursor joint venture, Ecopro GEM, and recently Ecopro acquired a stake in GEM and CATL's nickel mining project in Indonesia.

Hungary has become a hot spot in Europe for battery production with Samsung SDI and SK On operating some of Europe's largest cell manufacturing plants in the country, delivering batteries to companies such as Volkswagen and BMW. The establishments have also attracted other component manufacturers and the Korean battery recycler, Sungeel Hitech which also delivers material to Ecopro, operate two pre-processing plants in the country.

With two of the leading battery recyclers in the world in its supply chain Ecopro and its customers are in pole position to meet the new requirements on recycled content in the new battery regulation that is expected to enter into force in Europe in 2023. With an increasing focus on LFP batteries in China, companies which traditionally have been strong in mid- and high nickel cathode materials such as GEM and Huayou Cobalt are clearly intensifying their activities in Europe and the US, working with Korean cell producers which still favor high nickel cathodes.

At GEM's AGM the 20th of May the company revealed that the volume of waste EV batteries in the first quarter of 2022 amounted to 3,407 tonnes, an YoY increase of 341%, while over 400 MWh of batteries were reused. Our assumption is that a significant amount of this comes from R&D, tests and pre-production vehicles. Just like many other Chinese recyclers GEM acknowledges there is a challenge in sourcing end-of-life batteries as its up to the owner of the vehicles to decide what will happen to the batteries which means that they are often sold locally to smaller companies.