(Yicai) May 27 -- Shares of Tinci Materials Technology rose after the firm said it will invest as much as CNY2.1 billion (USD310 million) in a new factory in China to produce core raw materials for lithium iron phosphate batteries, as part of plans to further expand its cathode materials business.

After jumping by as much as 6.1 percent earlier today, the leading Chinese supplier of lithium battery electrolyte [SHE: 002709] closed 2.8 percent higher at CNY53.46 (USD7.88) a share. The wider Shenzhen market fell 1.3 percent.

The new plant will be located in Tiantai, Zhejiang province, and have an annual production capacity of 160,000 tons of high-compaction LFP, Tinci announced late yesterday. Preparatory work for the investment has already begun, it added.

The Guangzhou-based firm has completed pilot-scale mass production of the high-compaction LFP, it noted, without disclosing further details.

Compared with standard lithium iron phosphate, the high-compaction version has a greater compaction density, which allows batteries made with it to achieve higher energy density, better fast-charging performance, and a longer cycle life. It is mainly used in high-end power batteries and large energy storage batteries.

Tinci, one of China’s leading suppliers of lithium battery electrolyte and component chemicals, has in recent years expanded into other lithium material segments, including upstream iron phosphate and LFP precursors.

The company now has an annual capacity of 150,000 tons of LFP cathode materials, along with the capability to turn out upstream phosphorus-iron and lithium iron phosphate precursor materials. Its customers include Contemporary Amperex Technology, BYD, and Volkswagen-backed Gotion High-Tech.

Editor: Martin Kadiev