LG Energy Solution will build two battery recycling plants in eastern China under a joint venture with top Chinese cobalt producer Huayou Cobalt, marking the first collaboration of its kind in the industry between Korean and Chinese companies.

The pretreatment factory, which will be set up in Nanjing, Jiangsu province, will extract battery scrap generated from battery production and process used batteries, LG Energy Solution said in an announcement Tuesday.

The post-processing factory, which will be established in Quzhou, Zhejiang province, will work on recycling the extracted battery materials for nickel, cobalt and lithium.

LG Energy Solution said the plan is to break ground for the plants this year and begin operation sometime late next year. The extracted and recycled metals produced from the joint venture's plants will be supplied to the Korean battery maker's manufacturing site in Nanjing after undergoing the cathode production process.

Neither the scale of investment into the joint venture nor the specific terms of the agreement for the JV was disclosed. Tuesday's announcement followed up the two companies' previous signing of a business agreement for the battery recycling cooperation in July 2022.

"In order to establish a sustainable and stable battery supply chain, it is essential to establish a virtuous cycle of resources that manages the entire battery life cycle," said LG Energy Solution.

"Based on our cooperation with Huayou Cobalt, we can now further strengthen our capabilities in customer value in the recycling sector that utilizes sustainable resources."

The Korean battery maker added that it will further solidify the strategic partnership with the Chinese company and they will seek to expand cooperation in the battery recycling sector moving forward.

Huayou Cobalt, the largest cobalt producer in China, has continued to bolster its business relations with LG Energy Solution in recent years.

In April, the Chinese company and LG Chem, from which LG Energy Solution spun off, announced that they will invest a total of 1.2 trillion won ($913 million) by 2028 to build a precursor plant in the Saemangeum National Industrial Complex, North Jeolla Province. LG Chem's first overseas cathode manufacturing plant, which began operation in September 2020, was also another joint venture with Huayou Cobalt.

The battery recycling cooperation with the Chinese company comes as LG Energy Solution looks to ramp up its efforts to secure opportunities and a competitive edge in the battery recycling and rescue market.

In December 2021, LG Energy Solution and LG Chem each invested 30 billion won in Li-Cycle, a lithium-ion battery resource recovery and recycling leader in North America, to acquire a 2.6 percent stake in the Toronto-headquartered firm.

The Korean battery maker said it will bolster its environmental, social and governance management by 2027 as it plans to work with prominent companies near its manufacturing sites in the US, Poland and Asia across all value chains.