US battery giant Johnson Controls will stop lead processing at a plant in China's commercial hub Shanghai, the firm said, after the city found high levels of the metal in children living nearby.
The Fortune 500 company has denied the plant's operations caused elevated lead exposure for people living in Shanghai's Kangqiao area.
But Johnson Controls said in a statement it would stop lead processing at the facility in response to Shanghai authorities' moves to "remove lead manufacturing from the community".
In February, Shanghai blamed Johnson Controls and two Chinese companies for causing lead poisoning in 49 children, most of them aged between one and three.
The city has already shut the other two firms, Shanghai Xinmingyuan Automobile Parts Co. Ltd. and Shanghai Kangshuo Waste Recycling Co. Ltd., state media have reported.
"The link between children with excessive lead in their blood in Kangqiao and Johnson Controls' lead emissions is quite obvious and there is a definite link with Xinmingyuan's lead emissions," the government said in February.
In the statement, issued Monday, Johnson Controls said it had already shifted lead processing to other plants in China and the Shanghai plant would be used to store, label and ship batteries made elsewhere.
The president of Johnson Controls Power Solutions, Alex Molinaroli, said the company was "disappointed" with the Shanghai government's position.
"We stand by our environmental performance," he said in the statement. "We will continue to transparently work with governments and the industry to address environmental requirements."
Shanghai temporarily closed the Johnson Controls plant in September last year after accusations of lead poisoning surfaced through postings on the Internet by local residents.