South Korea’s GS Engineering & Construction Corp. (GS E&C) is establishing a lithium-ion battery recycling plant in a regulation-free zone on the country’s southeastern coast of Pohang at 100 billion won ($86 million) by 2022.

GS E&C signed the investment agreement with Pohang City and North Gyeongsang Province on Thursday, according to Ministry of SMEs and Startups. Under the agreement, the company will spend 100 billion won on setting up Li-ion battery recycling facilities in the Pohang regulation-free zone.

Regulation-free zone is a type of special economic zone where regulations are exempted for development of industries identified as future growth engines. There are 14 cities and provinces designated as regulation-free zone in Korea including Pohang.

Through the initial investment, the plant will aim to stock and reproduce used Li-ion batteries from electric vehicles and others into 4,500 tons of re-sellable metals like nickel, cobalt, lithium, and manganese annually. It will make additional investment to ramp up the reproduction capacity to 10,000 tons.

The North Gyeongsang provincial government aims to generate annual revenue of 800 billion won from recycling secondary battery wastes and secure 5.7 percent share of the global market as demand for Li-ion battery recycling will soar in line with increased use of electric-powered vehicles and automation.

The plant can aid a supply chain in the region and foster Pohang as a new hotbed for secondary battery business. Smaller producers will be assigned with the work to collect used Li-ion battery packs, dismantle and pulverize metals. GS E&S plant will extract rare-earth resources from the pulverized metals that can be reused in making rechargeable battery packs.

By Kim Sung-hoon, Choi Hee-seok, and Cho Jeehyun

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