LONDON- German industrial companies BASF and Heraeus said on Friday they would build a facility in China to recover precious metals such as platinum and palladium from vehicle exhaust systems.

Heraeus said the companies would invest $75 million.

They will be 50-50 partners in the venture in Pinghu, a city near Shanghai, with production due to begin in 2023, the companies said.

Vehicle exhaust systems are fitted with catalytic converters, which use platinum, palladium and rhodium to neutralise harmful emissions.

Each converter can contain precious metals worth hundreds of dollars. Platinum costs around $1,000 an ounce, palladium around $2,000 an ounce and rhodium around $18,000 an ounce.

BASF and Heraeus both already have industrial facilities in China.

(Reporting by Peter Hobson; editing by Jason Neely) ((Peter.Hobson@thomsonreuters.com; +44 207 542 0083;))