BEIJING (Reuters) - Sinochem International, a unit of state-run Chinese oil and chemical group Sinochem Corp [SASADA.Ul], said it has provisionally agreed to a 3 billion yuan ($454 million) project to produce raw materials for lithium batteries.
The company joins a host of firms looking to cash in on China’s battery boom, which has been spurred by the growing popularity of electric vehicles in the country.
In a statement to the Shanghai Stock Exchange on Friday, Sinochem International said its 40 percent-owned subsidiary, Jiangsu Ruisheng New Materials Technology Co, has signed a framework agreement with Cixian county government in northern Hebei province to pursue the project.
It aims to produce 30,000 tonnes per year of mesocarbon microbeads - synthetic graphite used in lithium-ion battery anodes - with first-phase output of 10,000 tonnes a year, the statement said. No timeframe was given for the launch.
Sinochem International said 600 million yuan had been earmarked for the project in 2018, but added that the overall investment amount has not been fixed.
Jiangsu Ruisheng is separately looking into a project in China’s Ningxia province that would produce 10,000 tonnes a year of high-quality nickel materials for battery cathodes, according to the statement.
“China’s lithium battery industry has made rapid development in the past and is also ushering in a huge market opportunity,” Sinochem International said, while pointing out the potential for raw material price fluctuations.
Sinochem Corp had last month been linked with a move to buy a stake in Chilean lithium producer SQM but denied it had such plans. [nL4N1MZ1BK]
The group’s chairman, Ning Gaoning, said in October that Sinochem was planning an expansion into material and life sciences over the next decade in a major strategy shift. [nL4N1MZ1OS]
Reporting by Tom Daly; Editing by Manolo Serapio Jr.