LG Chem Ltd., South Korea’s leading chemical maker, said Tuesday that it has agreed with a German chemical firm to set up a joint venture in South Korea to produce a cathode material for rechargeable batteries.

Under a memorandum of understanding with Sud-Chemie Inc., the joint venture will produce 2,500 tons of lithium iron phosphate cathode material annually from 2014, said LG Chem.

LG Chem did not give specifics on the deal, including how much it will spend on the project.

Cathode materials are the key components for lithium-ion rechargeable batteries. Particularly, LFP lithium-ion batteries have better chemical stability than rechargeable batteries with other cathode materials.

LG Chem said that the joint venture will help the company improve its competitiveness in the lithium-ion rechargeable battery market. 

(Yonhap News)