GEM to make 281 MUSD investment in new battery recycling and precursor plant in Jiangsu

GEM, one of the largest battery recyclers in China and in the world, will invest 1.8Bn RMB (281 MUSD) in a new recycling and precursor production plant in the Jiangsu province, North of Shanghai in China. The plant will process battery scrap and will have an output of 30,000 tonnes of NMC/NCA precursor, 10,000 tonnes of cobalt tetroxide and 3,000 tonnes of lithium-phosphate material, a first for GEM. If the production would be fed entirely by scrap material it would mean a capacity of over 120,000 tonnes material on cell level.

The same day for the announcement the company also revealed its plans to set up a disassembly plant for both electric vehicles and EV batteries in Wuxi in the same region. The plant which can be expected to be highly automated will have a capacity of 100,000 vehicles per year and 100,000 tonnes of batteries on pack level. The plant will be co-financed by Wuxi New District Technology Finance Venture Capital Group.

The work on the precursor plant will start in June 2021 for a staged commissioning between June 2022 and December 2023.

The investments will make GEM's presence in the Shanghai area to what it already is in the Wuhan region with full ability to disassemble vehicles, grade and repurpose batteries and ultimately recycle the batteries.

So far GEM's sourcing of end-of-life batteries and battery scrap has been mainly focused on China. The company has presence in South Korea, Indonesia and South Africa, primarily for sourcing of virgin materials and in the case for South Korea, for production of precursors and cathode materials in a joint venture with Ecopro. The new investments add to an already very high capacity for both reuse and recycling in China, far exceeding the supply of materials to recycle for several years. Last year GEM reported a volume of 10,000 tonnes (pack level) of EV batteries and an expected volume of 30,000 tonnes in 2021. About 90% of these batteries were estimated to be used in new products.

The plants do however contribute to GEM's position in the absolute forefront of players who will be able to take advantage of the the increasing volumes of batteries available or both reuse and recycling.