South Korea’s LG Chem and its EV battery making subsidiary LG Energy Solution announced they had invested a combined KRW60bn (US$50m) to acquire a 5.2% stake in Li-Cycle, a Canadian recycler of lithium-ion batteries.

The investment gave each a 2.6% stake in the Toronto-based company which they acquired through a recent rights issue.

The South Korean companies also agreed to buy 20,000 tons of nickel annually from Li-Cycle for 10 years from 2023, which they said was enough to produce 300,000 EV batteries.

Li-Cycle was established in 2016 and specialises in recovering key lithium-ion battery materials such as nickel and cobalt. It claims to have developed its own environment-friendly technology to extract the materials from used batteries.

LG Energy Solution, the world’s second-largest EV battery manufacturer, is investing heavily in production facilities globally to supply fast rising demand for EVs.

In North America it is building two EV battery plants in a joint venture with General Motors called Ultium Cell, as well as wholly owned facilities in the region with a planned production capacity of 75GWh annually by 2025.