LG Chem said Tuesday it has set up a joint venture with Tianjin B&M Science and Technology, a materials subsidiary of Chinese miner Huayou Cobalt, to secure a stable supply of key materials for high-nickel cathodes in its latest push for electric vehicle batteries.

Under the deal signed on Monday in Seoul, B&M is securing a 49 percent stake in LG Chem’s existing cathode-making unit in Gumi, North Gyeongsang Province, supplying essential materials for nickel, cobalt, manganese, and aluminum (NCMA) cathodes.

Due to their chemical composition, NCMA cathodes boast a higher density of nickel at 89 percent and allow a longer driving range for EVs.

With production set to start in the latter half of 2024, the joint venture’s production capacity is expected to reach 60,000 metric tons per year, which can power some 500,000 full-electric EVs.

The two firms agreed to invest about 500 billion won ($403 million) by 2025.

LG Chem said the latest deal is a win-win for both companies. LG Chem secures a stable supply of battery materials amid rising costs, while B&M is making inroads into overseas markets.

“Through this joint venture, we have further consolidated our vertical supply chain integration from key materials to cathodes,” said LG Chem CEO Shin Hak-cheol. “We will continue to grow as a global battery materials producer equipped with both high quality and price competitiveness.”