(Yicai Global) Aug. 13 -- Shares of China's LB Group rose after the major titanium dioxide producer said it will invest CNY5.4 billion (USD834 million) to expand its battery raw materials business.

LB's stock price [SHE: 002601] jumped as much as 10 percent to CNY37.39 (USD5.60) intraday, the highest since June.

The leading maker of a chemical used in coatings and drugs will spend CNY5.4 billion on four projects, three of which involve lithium battery materials, the Henan province-based firm said in a statement yesterday.

The rapidly increasing demand for electric bicycles drove the prices of battery material lithium iron phosphate to jump around 30 percent in the first half of this year, luring Chinese titanium dioxide firms with advantages in phosphate production to hike their output.

LB's rivals Annada Titanium Industry and CNNC HUA YUAN Titanium Dioxide have also recently revealed their plans to build iron phosphate or lithium iron phosphate plants.

Four Projects

Two of LB's upcoming facilities in the central Chinese province will make phosphates. The first lithium iron phosphate plant will be located in Qinyang and it will produce 200,000 tons of the inorganic compound used in electric vehicle batteries per year. The related investment will be CNY2 billion. The other plant in Jiaozuo will cost the firm CNY1.2 billion and the annual output of iron phosphate will be the same.

The two projects will use by-products from the firm’s local titanium dioxide factory as raw materials, the announcement added.

Moreover, LB will establish a graphite anode materials plant for CNY1.5 billion. The facility will eventually be able to produce 100,000 tons of the material each year. But initially, the output will be 25,000 tons.

Finally, the fourth new project will make 100,000 tons of titanium dioxide in Jiaozuo per year. The investment will be CNY700 million (USD108 million).

These are not the only projects the company is advancing. Last month, the firm said it will form a joint venture in Hubei province to build an iron phosphate plant with an annual capacity of 100,000 tons.

Editor: Emmi Laine, Xiao Yi