Oil Report

Exxon unit to build $322 mln S.Korea battery plant

SEOUL, Nov 29 (Reuters) - An Exxon Mobil Corp XOM.N affiliate is planning to invest 300 billion won ($322.1 million) to build a battery plant in Gumi, south of Seoul, the Gumi municipal office said on Thursday.

Tonen Chemical, Exxon’s Japanese affiliate, signed a memorandum of understanding to build a plant that produces battery separator film, a key component of lithium-ion batteries.

Production is to begin in 2009, with the construction of the plant starting next year, a Gumi spokesman said.

Lithium-ion batteries are often used in consumer electronics such as cell phones and laptop computers as they hold a charge longer than the nickel metal hydride batteries now used widely in automobiles. They are also lighter than their predecessors.

Exxon Mobil, the largest U.S. oil company, has long been dogged by criticism of its environmental record and accused of underinvesting in research and developing renewable energy.

Earlier this week, the oil company said its development of the film that allow battery companies to make larger lithium-ion batteries without overheating will be key in helping the automotive industry switch to lighter, more efficient batteries for hybrid and electric vehicles. [ID:nN27511383]

This technology could help automakers address one of the biggest challenges in producing a plug-in car, as they try to lower the cost of the batteries and boost their power and storage capacity. (Reporting by Angela Moon; Editing by Sei Chong)