Major South Korean chemical firm LG Chem Ltd. said Wednesday it is buying a stake in a local battery recycling startup for a joint venture in North America, accelerating efforts to secure key components for electric vehicle batteries.

LG Chem signed the agreement Tuesday with JaeYoung Tech Ltd. to invest 24 billion won ($18.7 million).

JaeYoung Tech, located in the South Korean industrial city of Gumi, about 200 kilometers southeast of Seoul, was established in 2016 and engages in the recycling of battery scrap to produce high-purity lithium carbonate, a key source in EV batteries.

Based on the investment agreement, LG Chem and JaeYoung Tech will set up a joint venture for the battery recycling in North America by the end of 2023, LG Chem said.

They will also seek partnership opportunities with local companies in the region.

LG Chem has been bolstering investment in battery recycling in a bid to secure stable supply of minerals and other sources used to make key battery materials, such as cathodes.

LG Chem and its battery-making spin-off LG Energy Solution Ltd. said last year they had jointly acquired a stake in Li-Cycle, a Canadian lithium-ion battery recycling company, by investing 30 billion won each. (Yonhap)