Another Chinese-South Korea investment deal has been done to produce lithium battery materials in China— in the latest sign of a thaw in economic tensions between the countries.
Chinese mining company Zhejiang Huayou Cobalt said its subsidiary, Huayou New Energy Technology, has signed a deal with South Korea’s LG Chem to launch two new joint venture companies at a total investment of some $645.6 million.
The announcement comes just weeks after Huayou formed a separate partnership with South Korea’s Posco to produce lithium-ion battery materials from bases in China.
The partnerships follow months of claims and counter claims over China’s alleged “blocking” of South Korean batteries in a heated trade spat.
According to Huayou, the new ventures will build a lithium battery precursors production facility in Zhejiang Province’s Quzhou, and an anode materials production site in Wuxi, near Shanghai.
The two new companies— whose joint ventures are to be known as Huajin New Energy Materials and Leyou New Energy Materials— will produce and sell precursors and anode materials for LG Chem’s automotive lithium-ion batteries. Huayou will hold a majority 51% stake in the first company to LG Chem’s 49%— and vice versa in the second enterprise.
Both new ventures are expected to reach 40,000 tons of annual capacity in their first stage of operations. However, the starting dates of operations have not yet been disclosed.
However, in an apparent note of warning surrounding the ‘warming’ of business relations between the two sides, Huayou warned “conditions in domestic and foreign markets, industrial policy and technological technology” could hamper or even halt the joint projects in their tracks.