LG Energy Solution Ltd. (LGES) said Tuesday it has signed a joint venture agreement with a Chinese mining company to build a battery recycling plant to secure raw materials for lithium-ion battery components.

The joint venture deal with Zhejiang Huayou Cobalt Co. will commit the two companies to build two factories to extract nickel, cobalt and lithium -- key components for lithium-ion batteries used in electric vehicles -- from scrap batteries and used batteries, the South Korean battery maker said in a release.

The pre-treatment plant that processes scrap batteries will be built in LGES' production facility in Nanjing, with the post-processing plant that processes recycled metal to be set up in Quzhou in western Zhejiang, where Huayou has its operations.

LGES and Huayou plan to work out terms and other details on the agreement to launch the joint venture company by the end of this year, LGES said.