A123 Systems says it has completed the sale of its facilities for the production of certain battery materials to Johnson Matthey.

The facilities in Changzhou, China, produce lithium iron phosphate (LFP), the cathode material A123 has historically used across its product portfolio and the companies have entered into a long-term supply agreement where Johnson Matthey will supply all of A123’s LFP requirements.

A123 says it is maintaining its research and development capability related to battery materials and is presently developing further improvements to its LFP formulation as well as other battery materials.

In the transaction, A123 has also retained ownership of its intellectual property in battery materials and Johnson Matthey will produce A123’s Nanophosphate formulation of LFP exclusively for A123.

“This deal is good for both companies as A123 seeks to rationalise its supply chain, while Johnson Matthey can leverage its substantial experience in the manufacturing of specialised materials,” said A123 Systems CEO, Jason Forcier.

“We look forward to a long and prosperous relationship with the Johnson Matthey team.”