LG Chem invests $18.6 million in battery recycler JaeYoung Tech

South Korea's LG Chem Ltd. is accelerating its entry into the North American battery recycling market by joining forces with JaeYoung Tech, a Korean recycler of waste batteries.

LG Chem on Wednesday said both companies signed an equity investment agreement worth 24 billion won ($18.6 million).

Based on their investment, LG Chem and JaeYoung Tech at the end of next year will set up a joint venture for battery recycling in North America.

LG Chem will lead the overall business including devising business models and its partner will handle technology-related matters such as plant design.

Both sides will advance their project by collaborating with companies with secure supply chains in North America.

Formed in 2016, JaeYoung Tech specializes in battery recycling and is based in Gumi, North Gyeongsang Province. The company possesses the technology to extract high-purity lithium from lithium waste or used batteries left by secondary battery makers.

Unlike the conventional method, Jae Young Tech uses a lithium extraction approach of applying heat to the battery material to extract the lithium first and treats manganese, cobalt and nickel later.

The company said the simple process can extract high-purity lithium, adding that its lithium recovery rate of over 85% is the world's highest.

Earlier, LG Chem along with LG Energy Solution Ltd. invested 60 billion won in Li-Cycle, the largest battery recycling company in North America.

 "This equity investment will lay the cornerstone for our advance to the global battery recycling market," Lee Sang-hyub, LG Chem's managing director for management strategy, said. "We will raise competitiveness through differentiated technologies and take the lead in building a circular economy," he added.

Write to Ik-Hwan Kim at lovepen@hankyung.com