GEM subsidiary signs contract with Lanjun New Energy to build green management system for power battery life cycle

In order to meet the requirements of global green supply chain management, solve the pollution problem of power batteries, realize the green treatment of power batteries and their waste, and promote the new energy industry from "green to green", Wuhan Power Battery Regeneration Technology Co., Ltd. (hereinafter referred to as "Power Regeneration"), a holding subsidiary of GEM Co., Ltd. (hereinafter referred to as "GEM" or "the Company"), and Lanjun New Energy Technology Co., Ltd. (hereinafter referred to as "Lanjun New Energy"), a holding subsidiary of Ruipu Lanjun Energy Co., Ltd. (hereinafter referred to as "Ruipu Lanjun"), based on good trust and for long-term strategic development considerations, signed the "Strategic Cooperation Agreement" on January 10, 2024 after friendly consultation. The two parties decided to work together to establish a deep strategic partnership, in the spirit of "mutual benefit, permanence, stability, efficiency and quality", based on the unified resource integration advantages, with the core of obtaining good social benefits and investment returns, in accordance with the requirements of global green supply chain management, to build a green management system for the entire life cycle of power batteries, form a world-class model for green recycling and utilization of power batteries, and jointly meet the requirements of global new energy green management.

Main contents of the agreement

Party A: Wuhan Power Battery Regeneration Technology Co., Ltd.

Party B: Lanjun New Energy Technology Co., Ltd.

(Party A, Party B, collectively referred to as the “Parties”)

The "waste power batteries and waste materials" mentioned in the following agreement terms refer to unqualified electric vehicle batteries (including nickel-cobalt-manganese/aluminum ternary, lithium iron phosphate modules, monomers, excluding lead-acid batteries) generated during retirement, abandonment and production processes worldwide, as well as batteries, waste electrodes and other battery waste materials that are scrapped due to other reasons.

1. Globally, retired/used power batteries and waste materials generated by Party B's global supply chain will be delivered to Party A for disposal on a priority basis under the same conditions according to market prices.

In accordance with the requirements of global green supply chain management, and following the principles of traceability management throughout the life cycle, with traceable sources, traceable destinations, and controllable nodes, we will implement full-process information management of waste power batteries to achieve safe recycling, storage, and green disposal of power batteries. Through cooperation between the two parties, we will build a green management system for the entire life cycle of power batteries, form a world-class model for green recycling of power batteries, and jointly meet the requirements of global green management of new energy.

2. The two parties discuss a directional recycling cooperation model of "waste for raw materials", that is, Party B delivers waste batteries and battery waste to Party A, and Party A uses green recycling technology to extract nickel, cobalt, manganese, lithium and other metals from the waste batteries and waste delivered by Party B, and produces battery-grade nickel, cobalt, manganese sulfate, lithium salt or lithium iron phosphate positive electrode materials, ternary precursors or positive electrode materials, which will be supplied to Party B on a priority basis on the premise that the quality and price meet Party B's requirements.

3. The two parties negotiate to maintain a high degree of communication and mutual trust in the development of lithium battery application scenarios. Under the same conditions, Party A shall give priority to purchasing battery cells, modules or standard boxes from Party B; under the same conditions, Party B shall give priority to supplying battery cells, modules or standard boxes to Party A.

4. When Party B connects with OEM customers, Party A can provide recycling and comprehensive utilization support for Party B and target customers to facilitate the development of Party B's customers. For the battery packs Party B has sold, Party B can choose to rely on Party A's industrial parks and recycling outlets that have been deployed across the country to build spare parts and parts warehouses. At the same time, its secondary after-sales service (battery packs need to be returned to the factory for repair) can be undertaken by Party A, and Party A will provide good after-sales service.

5. The two parties agree to rely on each other's innovation platforms to carry out research on innovative projects such as the resource utilization of waste power batteries, lithium salt or lithium iron phosphate positive electrode materials, ternary precursors and ternary materials, use each other's advantages to jointly build innovation platforms, jointly strive for and carry out national, provincial and municipal innovation and entrepreneurship projects, jointly explore global retired power battery recycling models, and jointly promote the technological progress of lithium iron phosphate, ternary precursors and ternary materials.

6. The two parties agree to further deepen cooperation and actively explore strategic cooperation in recycling systems, technology systems, capital systems, material supply and resource combinations, so as to jointly respond to the challenges of global new energy to costs, resources and capital, and jointly build a globally competitive supply chain and value chain.

7. The two parties recognize each other as strategic partners on a global scale and actively promote each other to jointly build a good global brand and reputation for both parties.

8. This agreement is a framework agreement. The specific cooperation under this agreement shall be negotiated by both parties based on the actual situation of the specific project and relevant laws and regulations and then the corresponding cooperation agreement and other relevant agreements shall be signed.